SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC  20549


                                    FORM 10-Q

(Mark  One)

 X     Quarterly  report  pursuant  to  Section  13  or  15(d) of the Securities
---
       Exchange  Act  of  1934

For  the  quarterly  period  ended  December  31,  1998

___   Transition  report  pursuant  to  Section  13  or  15(d) of the Securities
Exchange  Action  of  1934

For  the  transition  period  from ________________ to ________________


                         Commission File Number 0-19266

                        ALLIED HEALTHCARE PRODUCTS, INC.

                              1720 Sublette Avenue

                           St. Louis, Missouri  63110
                                  314/771-2400

                          IRS Employment ID 25-1370721

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding twelve months (or for such shorter periods that the
registrant  was  required to file such reports, and (2) has been subject to such
filing  requirements  for  the  past  ninety  days.

                    Yes   X    No  
                        -----      -----

     The  number  of  shares of common stock outstanding at February 11, 1999 is
7,806,682  shares.


<PAGE>
                                      INDEX

                                                          Page
Part I - Financial Information                           Number

Item 1.  Consolidated Statement of Operations -              3
         three months and six months ended December 31,
         1998 and 1997 (Unaudited)

         Consolidated Balance Sheet -                      4-5
         December 31, 1998 (Unaudited) and
         June 30, 1998

         Consolidated Statement of Cash Flows -            6-7
         three months and six months ended December 31,
         1998 and 1997 (Unaudited)

         Consolidated Statement of Changes in                8
         Stockholders' Equity - three months and six
         months ended December 31, 1998 (Unaudited)

         Notes to Consolidated Financial Statements       9-12

Item 2.  Management's Discussion and Analysis of         13-27
         Financial Condition and Results of Operations

Part  II  -  Other  Information

Item 6.  Exhibits and Reports on Form 8-K                   28

         Signature                                          29

                                        2
<PAGE>
PART  I.   FINANCIAL  INFORMATION
          ITEM  1.   FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                                                                     ALLIED HEALTHCARE PRODUCTS, INC.
                                                                 CONSOLIDATED STATEMENT OF OPERATIONS
                                                                                          (UNAUDITED)

                                                       Three months ended            Six months ended
                                                             December 31,                December 31,
                                               --------------------------  --------------------------
                                                   1998          1997          1998          1997
                                               ------------  ------------  ------------  ------------
<S>                                            <C>
Net sales                                      $17,092,293   $24,032,988   $34,951,396   $54,205,892
Cost of sales                                   13,669,635    17,290,512    27,122,125    38,234,136
                                               ------------  ------------  ------------  ------------
Gross profit                                     3,422,658     6,742,476     7,829,271    15,971,756

Selling, general and administrative expenses     4,724,043     6,322,144     9,601,391    13,574,731
Provision for restructuring and consolidation     (200,000)            0       772,850             0
Provision for product recall                     1,500,000             0     1,500,000             0
Gain on sale of business                                 0   (12,812,927)            0   (12,812,927)
Non-recurring impairment losses                          0     9,778,259             0     9,778,259
                                               ------------  ------------  ------------  ------------
Income (loss) from operations                   (2,601,385)    3,455,000    (4,044,970)    5,431,693

Other  expenses:
  Interest expense                                 444,153     1,212,581       977,817     3,072,400
  Other, net                                         5,045        40,311        23,991        87,250
                                               ------------  ------------  ------------  ------------
                                                   449,198     1,252,892     1,001,808     3,159,650
                                               ------------  ------------  ------------  ------------
Income (loss) before provision (benefit) for
  income taxes and extraordinary loss           (3,050,583)    2,202,108    (5,046,778)    2,272,043

Provision (benefit) for income taxes            (1,138,691)    8,886,340    (1,855,629)    9,063,463
                                               ------------  ------------  ------------  ------------
Loss before extraordinary loss                  (1,911,892)   (6,684,232)   (3,191,149)   (6,791,420)
Extraordinary  loss  on  early
  extinguishment  of  debt,  net  of
  income tax benefit of $373,191                         0             0             0       530,632

                                               ------------  ------------  ------------  ------------
Net Loss                                       ($1,911,892)  ($6,684,232)  ($3,191,149)  ($7,322,052)
                                               ============  ============  ============  ============

Basic  and  diluted  loss  per  share:
  Loss before extraordinary loss                    ($0.25)       ($0.86)       ($0.41)       ($0.87)
Extraordinary loss                                       -             -             -        ($0.07)
                                               ------------  ------------  ------------  ------------
  Net Loss                                          ($0.25)       ($0.86)       ($0.41)       ($0.94)
                                               ============  ============  ============  ============

Weighted average shares                          7,806,682     7,806,682     7,806,682     7,803,389
                                               ============  ============  ============  ============
</TABLE>
                    See accompanying Notes to Consolidated Financial Statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                                ALLIED HEALTHCARE PRODUCTS, INC.
                                                      CONSOLIDATED BALANCE SHEET
                                                                          ASSETS

                                                         December 31,   June 30,
                                                             1998          1998
                                                         -----------  -----------
                                                          (Unaudited)
<S>                                                      <C>          <C>
Current  Assets:
  Cash                                                   $   655,898  $ 1,194,813
  Accounts receivable, net of allowance for doubtful
    accounts of $1,068,787 and $1,035,833, respectively   12,716,835   14,227,314
  Inventories                                             17,043,475   18,341,340
  Other current assets                                     1,210,811      273,832

                                                         -----------  -----------
    Total current assets                                  31,627,019   34,037,299
                                                         -----------  -----------

  Property, plant and equipment, net                      15,153,548   17,525,906
  Goodwill, net                                           27,618,359   28,026,064
  Other assets, net                                          496,945      590,933

                                                         -----------  -----------
    Total assets                                         $74,895,871  $80,180,202
                                                         ===========  ===========
</TABLE>

                    See accompanying Notes To Consolidated Financial Statements.


                                                                     (CONTINUED)

                                        4
<PAGE>
<TABLE>
<CAPTION>
                                                          ALLIED HEALTHCARE PRODUCTS, INC.
                                                                CONSOLIDATED BALANCE SHEET
                                                                               (CONTINUED)
                                                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                December 31,    June 30,
                                                                    1998          1998
                                                                ------------  ------------
                                                                 (Unaudited)
<S>                                                             <C>           <C>
Current  liabilities:
  Accounts payable                                              $ 6,006,634   $ 5,807,349
  Current portion of long-term debt                               1,056,030     3,442,797
  Accrual for restructuring and consolidation                        55,146             0
  Accrual for product recall                                      1,500,000             0
  Other current liabilities                                       2,086,061     3,479,215

                                                                ------------  ------------
    Total current liabilities                                    10,703,871    12,729,361
                                                                ------------  ------------

Long-term debt                                                   14,904,083    14,971,775

Deferred income tax liability-noncurrent                            441,589       441,589

Commitments  and  contingencies

Stockholders'  equity:
  Preferred stock; $.01 par value; 1,500,000 shares
   authorized; no shares issued and outstanding; which
    includes Series A preferred stock; $.01 par value; 200,000  
    shares authorized; no shares issued and outstanding
  Common stock; $.01 par value; 30,000,000 shares
    authorized; 7,806,682 shares issued and outstanding
    at December 31, 1998 and June 30, 1998                          101,102       101,102
Additional paid-in capital                                       47,014,621    47,014,621
Common stock in treasury, at cost                               (20,731,428)  (20,731,428)
Retained earnings                                                22,462,033    25,653,182

                                                                ------------  ------------
Total stockholders' equity                                       48,846,328    52,037,477

                                                                ------------  ------------
Total liabilities and stockholders' equity                      $74,895,871   $80,180,202
                                                                ============  ============

                              See accompanying Notes To Consolidated Financial Statements.
</TABLE>

                                        5
<PAGE>
<TABLE>
<CAPTION>
                                                     ALLIED HEALTHCARE PRODUCTS, INC.
                                                 CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                          (UNAUDITED)

                                                                Six months ended
                                                                   December 31,
                                                           --------------------------
                                                               1998          1997
                                                           ------------  ------------
<S>                                                             <C>           <C>
Cash  flows  from  operating  activities:
  Net loss                                                 ($3,191,149)  ($7,322,052)
  Adjustments to reconcile net loss to net
  cash provided by (used in) operating activities:

  Depreciation and amortization                              2,041,725     2,891,467
  Provision for restructuring and consolidation                273,072             0
  Provision for product recall                               1,500,000             0
  Gain on sale of Bear Medical                                       0   (12,812,927)
  Loss on refinancing of long-term debt                              0       903,823
  Noncash portion of non-recurring impairment losses                 0     9,528,398
  Decrease in accounts receivable, net                       1,510,479       465,885
  Decrease (increase) in inventories                         1,297,865      (486,272)
  Increase in income taxes receivable                         (980,947)            0
  Decrease in deferred income taxes - asset                          0     2,001,014
  Decrease in other current assets                              43,968       358,608
  Increase (decrease) in accounts payable                      199,285    (2,906,836)
  Increase (decrease) in accrued income taxes                 (942,036)
                                                             5,530,512
  Decrease in other current liabilities                       (451,118)   (1,490,204)
  Increase in deferred income taxes - liability                      0       634,849
                                                           ------------  ------------
    Net cash provided by (used in) operating activities      1,301,144    (2,703,735)
                                                           ------------  ------------


Cash  flows  from  investing  activities:
  Capital expenditures, net                                   (746,783)     (468,856)
  Proceeds on sale of Toledo, Ohio facilities                1,393,287             0
  Proceeds on sale of Bear Medical, net of disposal costs            0    36,001,160
                                                           ------------  ------------

    Net cash provided by investing activities                  646,504    35,532,304
                                                           ------------  ------------
</TABLE>
                                                                     (CONTINUED)

                                        6
<PAGE>
                                              ALLIED HEALTHCARE PRODUCTS, INC.
                                          CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                   (CONTINUED)
                                                                   (UNAUDITED)

                                                          Six months ended
                                                            December 31,

                                                        1998          1997
                                                    ------------  ------------
Cash  flows  from  financing  activities:
  Proceeds from issuance of long-term debt            5,000,000    26,000,000
  Payments of long-term debt                         (6,186,306)  (35,642,061)
  Borrowings under revolving credit agreement        44,295,422    74,751,622
  Payments under revolving credit agreement         (45,563,575)  (96,659,252)
  Issuance of common stock                                    0        68,750
  Debt issuance costs                                   (32,104)     (961,532)

                                                    ------------  ------------
    Net cash used in financing activities            (2,486,563)  (32,442,473)
                                                    ------------  ------------

  Net increase (decrease) in cash and equivalents      (538,915)      386,096
  Cash and equivalents at beginning of period         1,194,813       988,436

                                                    ------------  ------------
  Cash and equivalents at end of period             $   655,898   $ 1,374,532
                                                    ============  ============


Supplemental  disclosures  of  cash  flow  information:
  Cash  paid  during  the  period  for:
    Interest                                       $  1,120,525   $ 3,668,177
    Income taxes                                   $     82,348   $    77,118

                    See accompanying Notes To Consolidated Financial Statements.

                                        7
<PAGE>
                                                ALLIED HEALTHCARE PRODUCTS, INC.
                                            CONSOLIDATED STATEMENT OF CHANGES IN
                                                            STOCKHOLDERS' EQUITY
                                                                     (UNAUDITED)

<TABLE>
<CAPTION>
                                             Additional
                        Preferred   Common     paid-in      Treasury       Retained
                          stock     stock      capital       stock         earnings
                        ---------  --------  -----------  -------------  ------------
<S>                     <C>        <C>       <C>          <C>            <C>
Balance, June 30, 1998  $       0  $101,102  $47,014,621  ($20,731,428)  $25,653,182

Net  loss  for  the
  six  months  ended
  December 31, 1998                                                       (3,191,149)

Balance,
  December 31, 1998   $       0  $  101,102  $47,014,621  ($20,731,428)  $22,462,033
                      =========  ==========  ===========  =============  ===========
</TABLE>

                    See accompanying Notes To Consolidated Financial Statements.

                                        8
<PAGE>
                        ALLIED HEALTHCARE PRODUCTS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.     Unaudited  Financial  Statements

     The  accompanying  unaudited  financial  statements  have  been prepared in
accordance  with  the  instructions  for Form 10-Q and do not include all of the
information  and  footnotes required by generally accepted accounting principles
for  complete  financial  statements.  In  the  opinion  of  management,  all
adjustments,  consisting  only  of  normal  recurring  adjustments  considered
necessary  for  a  fair presentation, have been included.  Operating results for
any  quarter are not necessarily indicative of the results for any other quarter
or  for  the full year.  These statements should be read in conjunction with the
financial  statements and notes to the consolidated financial statements thereto
included  in  the  Company's  Form  10-K  for  the  year  ended  June  30, 1998.

2.  Inventories

     Inventories  are  comprised  as  follows:


                  December 31,  June 30, 1998
                     1998
                  (Unaudited)
Work-in progress  $  1,086,031  $   2,424,041
Component Parts     13,419,243     14,820,526
Finished Goods       2,538,201      1,096,773
                  ------------  -------------
                  $ 17,043,475  $  18,341,340
                  ============  =============

The  above  amounts  are  net  of a reserve for obsolete and excess inventory of
approximately  $2.0  million  and $2.2 million at December 31, 1998 and June 30,
1998,  respectively.


3.  LSP  Oxygen  Regulator  Recall

On  February  4,  1999,  Allied announced a recall of aluminum oxygen regulators
marketed  under  its  Life  Support  Products label.  These products are used to
regulate  pressure  of  bottled  oxygen  for  administration  to  patients under
emergency  situations.  Following  reports  of  regulator fires, the Company had

                                        9
<PAGE>
instituted  a  recall  in  May  1997,  under  which it provided retrofit kits to
prevent  contaminants  from  entering the regulators.  The Company has also been
testing  regulator  design  with  the  help  of  NASA's  White  Sands  National
Laboratories.  Meanwhile,  two  fires  involving  the  Company's regulators were
reported.  While  preliminary findings lead the Company to believe the Company's
products did not cause those fires, there is enough concern among the users that
the Company, in cooperation with the U. S. Food and Drug Administration ("FDA"),
has  agreed  to  institute a  voluntary recall to replace aluminum components in
the  high  pressure  chamber  of  the  regulators  with  brass  components  at
pre-existing  authorized  service  centers.  The  FDA  has  recommended that all
regulator  manufacturers cease use of aluminum in  regulators.  Accordingly, the
Company  will soon be introducing new brass regulators and will offer a trade in
program  to  the  existing  users.  Based  on an estimated population of 100,000
regulators, the recall could cost as much as $2.7 million or more.  However, the
Company will make every effort to mitigate these costs and has recorded a charge
of  $1.5  million  pre-tax,  $0.9  million after tax, or $0.12 per share in this
quarter.

4.  Debt  Refinancing

     On  August  7,  1998,  the Company borrowed approximately $5.0 million from
LaSalle  National  Bank.  The borrowing was secured by a first security interest
in  the  Company's  St. Louis facility.  The loan requires monthly principal and
interest  payments  of  $.06  million, with a final payment of all principal and
interest  remaining unpaid due at maturity on August 1, 2003.  Interest is fixed
at  7.75% per annum.  Proceeds from the borrowing were used to pay down existing
debt,  which  bore  a higher interest rate.  The loan agreement includes certain
debt  covenants  which  the  Company must comply with over the term of the loan.

     On September 8, 1998, the Company's credit facilities with Foothill Capital
Corporation  were  amended.  The Company's existing term loan was eliminated and
replaced  with  an amended revolving credit facility.  As amended, the revolving
credit facility remains at $25.0 million.  The interest rate on the facility has
been  reduced  from the floating reference rate (7.75% at January 31, 1999) plus
0.50% to the floating reference rate plus 0.25%.  The reference rate, as defined
in  the  credit  agreement,  is  the  variable rate of interest, per annum, most
recently  announced  by  Norwest  Bank  Minnesota,  National Association, or any
successor  thereto,  as  its  "base  rate".

          This  amendment also provides the Company with a rate of LIBOR + 2.5%.
Interest  rates on the reference rate and LIBOR will drop by 0.25% at the end of
fiscal  1999  and  2000  if  the  company  is profitable.  In addition, the fees
charged  to  the  company  are  also  reduced.

     5.  B&F  Relocation  provision

          On  August 5, 1998 the Company's board of directors voted to close the
Toledo  facility  of its disposable products division and relocate production of
the  B&F  line of home care products to its manufacturing facility in St. Louis,

                                       10
<PAGE>
Missouri. This move was announced on August 10, 1998. The move was substantially
completed  during  the  second  quarter  of fiscal 1999.  In connection with the
shutdown  of  the  facility,  Allied  recorded a provision of approximately $1.0
million  pre-tax,  $0.6  million  after  tax,  or  $0.07 per share, in the first
quarter of fiscal 1999 to cover the cost of closing the facility.  The provision
reflects  costs  of certain fixed asset impairments, employee severance benefits
and  other  related  exit  costs.   Subsequently,  during  the second quarter of
fiscal  1999,  the  company  negotiated and received a $0.2 million cash payment
from  the  City  of  Toledo  as  partial  reimbursement  for  relocation  costs.
Accordingly,  Allied recorded this cash payment, in the second quarter of fiscal
1999,  as  a reduction to the aforementioned provision resulting in a net charge
of  $0.8 million pre-tax, $0.5 million after tax, or $0.06 per share for the six
months ended December 31, 1998.  These costs have substantially been paid during
the  second  quarter  of  fiscal  1999.

               A  reconciliation  of  activity  with  respect  to  the Company's
restructuring  and  consolidation  of  the  B&F  product  line  is  as  follows:

Provision Balance, September 30, 1998    $ 614,008
Noncash asset impairments                   (4,196)
Cash payments associated with severance   (498,570)
Other exit costs incurred                  (56,096)
                                         ----------
Ending Balance, December 31, 1998        $  55,146
                                         ==========

6.  Sale  of  Bear  Ventilation  Products  Division

     On  October  31, 1997, the Company sold the assets of Bear Medical Systems,
Inc.  ("Bear")  and  its  subsidiary BiCore Monitoring Systems, Inc. ("BiCore"),
collectively  referred  to  as  the  ventilation  products  division,  to
Thermo-Electron  Corporation  for  $36.6  million plus the assumption of certain
liabilities.  The  net  proceeds of $29.5 million, after expenses which included
federal  and state taxes paid, were utilized to pay a significant portion of the
Company's subordinated debt.  The sale of the ventilation products division also
resulted  in a gain, for financial reporting purposes, of $12.8 million pre-tax,
$3.5  million  after  tax,  or  $0.45  per share for the six month period ending
December  31,  1997.

     Results  for  the  ventilation  products  division  are  included  in  the
Consolidated  Statement of Operations for one month and four months in the three
month  and  six  month  periods  ended December 31, 1997, respectively.  Had the
divestiture  occurred  on  July  1,  1997, consolidated pro forma net sales, net
loss, and loss per share for the three months ended December 31, 1997 would have
been  $20.7  million,  $(10.3) million, and $(1.32), respectively.  Consolidated
pro  forma  net  sales,  net  loss,  and loss per share for the six months ended
December  31,  1997 would have been $43.8 million, $(11.2) million, and $(1.43),
respectively.

                                       11
<PAGE>
7.  Other  Non-Recurring  Items

          In  the  second  quarter  of  fiscal 1998, the Company reevaluated the
carrying  value of its various businesses and recorded a non-recurring charge to
operations  of  $9.8 million.  This charge consisted of $8.9 million in goodwill
writedowns,  $0.5 million of consulting fees related to a cooperative purchasing
study and $0.4 million for the writedown of leasehold improvements and a reserve
for  the  remaining  lease payments on a facility in Mt. Vernon, Ohio related to
the  Company's  Toledo,  Ohio  disposable  products  division.  The  goodwill
writedowns,  pursuant  to the Company's impairment policy described in Note 2 in
the  June  30,  1998  financial statements, reflects overall changes in business
conditions  for  primarily its headwall and disposable products businesses which
continue  to experience weakness in financial results due to a variety of market
conditions.


                                       12
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS.


GENERAL
-------

The  following  discussion  summarizes  the  significant  factors  affecting the
consolidated  operating  results  and  financial  condition of Allied Healthcare
Products,  Inc.  ("Allied"  or  the "Company") for the three month and six month
periods  ended  December  31,  1998  compared  to  the three month and six month
periods  ended December 31, 1997.  This discussion should be read in conjunction
with  the June 30, 1998 consolidated financial statements and accompanying notes
thereto  included  in  the Company's Form 10-K for the year ended June 30, 1998.

Certain  statements  contained  herein  are  forward-looking statements.  Actual
results  could  differ  materially from those anticipated as a result of various
factors, including cyclical and other industry downturns, the effects of federal
and  state  legislation  on  healthcare  reform, including Medicare and Medicaid
financing,  the  ability  to  realize  the  full  benefit  of  recent  capital
expenditures  or  consolidation  and rationalization activities, difficulties or
delays  in  the  introduction  of  new  products  or  disruptions  in  selling,
manufacturing  and/or  shipping  efforts.

The review of and comparability of year to year operating results is complicated
by  the  sale  of  the  ventilation  products division on October 31, 1997.  The
fiscal  1998  results  include  ventilation products division operations for one
month  and  four  months in the three month and six month periods ended December
31,  1997,  respectively.

The  specific transactions and events impacting 1999 and 1998 operating results,
which  make  meaningful  comparisons  more  difficult,  are  summarized  below.

LSP  OXYGEN  REGULATOR  RECALL
------------------------------

On  February  4,  1999,  Allied announced a recall of aluminum oxygen regulators
marketed  under  its  Life  Support  Products label.  These products are used to
regulate  pressure  of  bottled  oxygen  for  administration  to  patients under
emergency  situations.  Following  reports  of  regulator  fires,  some of which
involved  Company  product,  the  Company instituted a recall in May 1997, under
which  it  provided  retrofit  kits  to  prevent  contaminants from entering the
regulators.  The  Company  has also been testing regulator design  with the help
of NASA's White Sands National Laboratories.  Meanwhile, two fires involving the
Company's regulators were reported.  While preliminary findings lead the Company
to  believe  the  Company's  products  did  not cause the fires, there is enough
concern among the users that the Company, in cooperation with the U. S. Food and
Drug  Administration  ("FDA"),  has  agreed  to institute a  voluntary recall to
replace  aluminum components in the high pressure chamber of the regulators with
brass  components  at  pre-existing  authorized  service  centers.  The  FDA has

                                       13
<PAGE>
recommended  that  all  regulator  manufacturers  cease  use  of  aluminum  in
regulators.  Accordingly,  the  Company  will  soon  be  introducing  new  brass
regulators and will offer a trade in program to the existing users.  Based on an
estimated  population  of  100,000  regulators, the recall could cost as much as
$2.7  million  or more.  However, the Company will make every effort to mitigate
these  costs  and  has  recorded  a charge of $1.5 million pre-tax, $0.9 million
after  tax,  or  $0.12  per  share  in  this  quarter.

B&F  RELOCATION
---------------

On  August  10,  1998,  the  Company announced its intention to close the Toledo
facility  of  its disposable products division and relocate the B&F product line
of  home  care  products  to  its St. Louis manufacturing facility.  The Company
anticipates  that  the  move,  which  was  substantially completed in the second
quarter of fiscal 1999, will generate annual savings of nearly $1.0 million.  In
connection  with  the  shutdown of the facility, the Company recorded a one-time
charge  of  approximately  $1.0  million ($0.6 million after taxes), or $.07 per
share  during  the first quarter of fiscal 1999. Subsequently, during the second
quarter  of fiscal 1999, the company negotiated and received a $0.2 million cash
payment  from  the City of Toledo as partial reimbursement for relocation costs.
Accordingly,  Allied  recorded  this  cash  payment  as  a  reduction  to  the
aforementioned  provision,  in the second quarter of fiscal 1999, resulting in a
net  charge  of $0.8 million pre-tax, $0.5 million after tax, or $0.06 per share
for the six months ended December 31, 1998.  These costs have substantially been
paid  during  the  second  quarter of fiscal 1999.  The Company will continue to
review  its operations for opportunities to improve efficiencies.  See Note 5 in
the  Notes  to  the Consolidated Financial Statements for additional information
concerning  the  details  of  the Company's restructuring provision, including a
reconciliation  of  the  reserve  relating  thereto.

DEBT  REFINANCING
-----------------

In  August  1997, the Company refinanced its existing debt through a $46 million
credit  facility  with  Foothill Capital Corporation.  In conjunction with these
new  credit facilities, Allied placed an additional $5.0 million in subordinated
debt with several related parties to the company.  The Foothill Credit facility,
which  was  amended  in  November 1997 to reflect the effects of the sale of the
ventilation  products  division,  and  again in September 1998 to further reduce
interest  rates,  has  allowed  the  Company to improve its liquidity and reduce
interest  expense  in comparison to prior years. In addition, on August 7, 1998,
the Company borrowed approximately $5.0 million from LaSalle National Bank.  The
borrowing  was  secured  by  a  security  interest  in  the  Company's St. Louis
facility.  This  loan  further reduces the Company's borrowing interest rate and
increases  liquidity.

SALE  OF  VENTILATION  DIVISION  ASSETS
---------------------------------------

The  Company  sold  the  assets  of  Bear Medical Systems, Inc. ("Bear") and its
subsidiary BiCore Monitoring Systems, Inc.  ("BiCore"), collectively referred to
as  the  ventilation products division, to Thermo-Electron Corporation for $36.6

                                       14
<PAGE>
million  plus  the assumption of certain liabilities.  The net proceeds of $29.5
million,  after  expenses  including  federal  and state taxes, were utilized to
repay  a significant portion of the Company's term notes and to repay all of its
subordinated  debt, $15.8 million of which had a coupon rate of 14.0% per annum.

GOODWILL  WRITEDOWNS
--------------------

During  the  second quarter of fiscal 1998, the Company reevaluated the carrying
value  of  its  various  businesses  and  recorded $9.8 million of non-recurring
charges to reflect the changes in business conditions resulting from the sale of
the  ventilation products division and due to other changes in market conditions
which culminated during the second quarter of fiscal 1998.  Goodwill writedowns,
which  were determined pursuant to the Company's impairment policy, totaled $8.9
million.  As  a result of the carrying value of goodwill for certain businesses,
the Company reduced its annual amortization charges by $0.3 million or $0.04 per
share.

FINANCIAL  INFORMATION
----------------------

The  following table sets forth, for the fiscal period indicated, the percentage
of  net  sales  represented  by  certain  items  reflected  in  the  Company's
consolidated  statement  of  operations.  Results  of  the  ventilation products
division  are  included for one month and four months in the three month and six
month  periods  ended  December  31,  1997.

<TABLE>
<CAPTION>
                                             Three Months Ended  Six Months Ended
                                                  December 31,     December 31,
                                                  1998    1997    1998     1997 
                                                -------  ------  ------  --------
<S>                                             <C>      <C>     <C>     <C>

Net sales                                       100.0%   100.0%  100.0%   100.0%
Cost of sales                                    80.0     71.9    77.6     70.5 
                                                -------  ------  ------  --------
Gross profit                                     20.0     28.1    22.4     29.5 
Selling, general and administrative expenses     27.6     26.3    27.5     25.0 
Provision for restructuring and consolidation    (1.2)     0.0     2.2      0.0 
Provision for product recall                      8.8      0.0     4.3      0.0 
Gain on sale of business                          0.0    (53.3)    0.0    (23.6)
Non-recurring impairment losses                   0.0     40.7     0.0     18.0 
                                                -------  ------  ------  --------
Income (loss) from operations                   (15.2)    14.4   (11.6)    10.0 
Interest and other expense                        2.6      5.2     2.8      5.8 
Income (loss) before provision (benefit)
                                                -------  ------  ------  --------
     for income taxes                           (17.8)     9.2   (14.4)     4.2 
Provision (benefit) for income taxes             (6.6)    37.0    (5.3)   (16.7)
                                                -------  ------  ------  --------
Loss before extraordinary item                  (11.2)   (27.8)   (9.1)   (12.5)
Extraordinary loss                                0.0      0.0     0.0     (1.0)
                                                -------  ------  ------  --------
Net loss                                        (11.2)%  (27.8)%  (9.1)%  (13.5)%
                                                -------  ------  ------  --------
</TABLE>

                                       15
<PAGE>
RESULTS  OF  OPERATIONS
-----------------------

Allied  manufactures  and  markets  medical  gas  equipment,  respiratory  care
products,  and  emergency  medical  products.  Set  forth  below  is  certain
information  with  respect  to amounts (dollars in thousands) and percentages of
net  sales attributable to medical gas equipment, respiratory care products, and
emergency  medical  products.  The  ventilation  products  division  was sold on
October 31, 1997.  Net sales for the ventilation products division for the three
month  and six month periods ended December 31, 1997 were $3.3 million and $10.4
million,  respectively  and  these  results are included in the Respiratory Care
Products.

<TABLE>
<CAPTION>
                         THREE MONTHS ENDED  THREE MONTHS ENDED
                           DECEMBER 31,1998  DECEMBER 31,1997

                                      % of             % of 
                                     Total            Total
                             Net      Net     Net      Net
                            Sales    Sales   Sales    Sales
                            -------  ------  -------  ------
<S>                         <C>      <C>     <C>      <C>

Medical Gas Equipment       $ 9,348   54.7%  $10,691   44.5%
Respiratory Care Products     5,537   32.4%   10,763   44.8%
Emergency Medical Products    2,207   12.9%    2,579   10.7%
                            -------  ------  -------  ------
Total                       $17,092  100.0%  $24,033  100.0%
                            =======  ======  =======  ======
</TABLE>


<TABLE>
<CAPTION>
                           SIX MONTHS ENDED  SIX MONTHS ENDED
                           DECEMBER 31,1998  DECEMBER 31,1997

                                     % of             % of 
                                     Total            Total
                             Net      Net     Net      Net
                            Sales    Sales   Sales    Sales
                            -------  ------  -------  ------
<S>                         <C>      <C>     <C>      <C>

Medical Gas Equipment       $18,201   52.1%  $22,827   42.1%
Respiratory Care Products    12,150   34.8%   25,821   47.6%
Emergency Medical Products    4,600   13.1%    5,558   10.3%
                            -------  ------  -------  ------
Total                       $34,951  100.0%  $54,206  100.0%
                            =======  ======  =======  ======
</TABLE>

                                       16
<PAGE>
THREE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO THREE MONTHS ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1997.
-----

Allied  had  net  sales of $17.1 million for the three months ended December 31,
1998,  down $6.9 million, or 28.9%, from net sales of $24.0 million in the prior
year  same  quarter.  $3.3  million of this decrease was attributable to the now
divested  ventilation  products  division.  Base business sales declined by $3.6
million or 17.4% primarily due to disruption caused by the relocation of the B&F
product  line, slow ramp-up of production in St. Louis, hold up of production of
LSP  regulators  which  are  not subject to recall as described in Note 3 in the
Notes  to  the Consolidated Financial Statements, as well as production problems
in  St. Louis that were not resolved in a timely manner.  The Company is rapidly
improving its manufacturing efficiency for B&F products and is supplementing its
capacity  with outsourced products.  Most of the manufacturing problems have now
been  resolved.  Capacities  needed  to  handle  the  LSP regulator recall will,
however,  continue  to  adversely  impact revenues for that product line for the
rest  of  the  fiscal  year.

Medical gas equipment sales in the second quarter of fiscal 1999 of $9.3 million
were $1.4 million, or 12.6%, lower than sales of $10.7 million in the prior year
same  quarter.  Headwall  sales declined from $1.2 million in the second quarter
of  fiscal  1998  to  $0.9 million in the second quarter of fiscal 1999 due to a
lower  level  of  bookings  last  year.  
This business is affected by large bid business which remains weak.  Medical gas
construction  sales  declined  from $4.6 million in the second quarter of fiscal
1998  to  $3.8  million  in the second quarter of fiscal 1999, while medical gas
suction  and  regulation  device sales decreased from $4.9 million in the second
quarter  of  fiscal  1998  to $4.6 million in the second quarter of fiscal 1999.
Both product lines experienced production problems which have now been resolved.

Respiratory  care  product  sales  in  the second quarter of fiscal 1999 of $5.5
million  were  $5.2  million,  or 48.6%, less than sales of $10.7 million in the
prior  year  same quarter.  $3.3 million of this decline was attributable to the
sale  of  the ventilation products division. Home care sales declined 31.7% from
$5.6  million  to  $3.9 million due to the relocation of the Toledo facility and
represents  most  of  the  remaining  shortfall.

Emergency  product  sales declined 14.4% from $2.6 million in the second quarter
of  fiscal  1998 to $2.2 million in the second quarter of fiscal 1999, primarily
due  to  the  suspension  of  aluminum  oxygen  regulator  shipments.

Orders  for  three  months ended December 31, 1998 were $18.2 million, down $5.5
million from the prior year same quarter.  Excluding $3.4 million in orders from
the ventilation products division, base business orders declined $2.1 million or
10.2%.  The  Company's  increasing  backlog  adversely affected incoming orders.
Emergency  product  orders  increased  11.7%  from $2.5 million to $2.8 million.
Total  medical  gas  equipment orders were $9.5 million or 4.9% higher than last

                                       17
<PAGE>
year  same  quarter  of  $9.1  million.  Base  business Respiratory care product
orders,  declined 32.2% from $8.7 million to $5.9 million primarily because Home
care  orders  declined  31.6%  from  $6.7 million to $4.6 million due to factors
discussed above.  Sequentially, orders decreased from $21.0 million in the first
quarter  of fiscal 1999 to $18.2 million or 13.4% in the second quarter of 1999.
The  Company's  backlog  now  stands  at  $21.0  million, up 1.9% from the prior
quarter  level  of  $20.6  million.

International  sales,  which  are included in the product lines discussed above,
decreased  $2.9  million,  or  46.0%,  to  $3.5 million in the second quarter of
fiscal  1999  from  $6.4  million  in the prior year same period.  International
sales  declined  $2.2  million  due  to  the  sale  of  the ventilation products
division,  while the base business international sales declined by $0.7 million,
or  17.2%.  The  continued  problems  in  Asia,  Russia  and South America, have
reduced  international sales and orders.  The Company continues to emphasize the
importance  of  worldwide  markets  as  advances  in medical protocol in various
markets throughout the world will lead to increased demand for medical products.

Gross  profit  for the three months ended December 31, 1998 was $3.4 million, or
20.0%  of  net sales compared to a gross profit of $6.7 million, or 28.1% of net
sales  for  the  three  months  ended  December  31, 1997. Reduced manufacturing
throughput  due to the B&F  relocation and lower absorption of plant overhead, a
direct result of lower sales volume, has further reduced margins as a percent to
net  sales.  Pricing pressures brought on by consolidations and cost containment
initiatives  within  the industry continue to impact margins as a percent to net
sales.  In  addition,  the sale of the high margin ventilation products division
adversely impacted gross profit comparison of the second quarters of fiscal 1999
to  fiscal  1998.  Results of the ventilation products division are included for
one  month  in  the  three  months  ended  December  31,  1997.

Selling,  General  and  Administrative  ("SG&A")  expenses  for the three months
ended  December 31, 1998 were $4.7 million, a decrease of $1.6 million, or 25.3%
from  $6.3  million  for  the three months ended December 31, 1997.  Of the $1.6
million  decline,  $0.7  million  is  directly  attributable  to the sale of the
ventilation  products  division,  $0.1 million is attributable to a reduction in
goodwill  amortization  resulting from the writedown of goodwill in fiscal 1998,
and  $0.8  million  is  attributable to spending reductions in the base business
SG&A.

On  August  10,  1998  the  Company  announced its intention to close the Toledo
facility  of  its disposable products division and relocate the B&F product line
of  home  care  products  to its St. Louis manufacturing facility.  The move was
substantially completed during the second quarter of fiscal 1999.  In connection
with  the  shutdown  of  the facility, the Company recorded a one-time charge of
approximately  $1.0 million ($0.6 million after taxes), or $.07 per share during
the  first  quarter  of  fiscal 1999. Subsequently, during the second quarter of
fiscal  1999,  the  company  negotiated and received a $0.2 million cash payment
from  the  City  of  Toledo  as  partial  reimbursement  for  relocation  costs.

                                       18
<PAGE>
Accordingly,  Allied  recorded  this  cash  payment  as  a  reduction  to  the
aforementioned  provision,  in the second quarter of fiscal 1999, resulting in a
net  charge  of $0.8 million pre-tax, $0.5 million after tax, or $0.06 per share
for  the  six  months  ended  December 31, 1998.  See Note 5 in the Notes to the
Consolidated  Financial  Statements  for  additional  information concerning the
details  of the Company's restructuring provision, including a reconciliation of
the  reserve  relating  thereto.

On  October  31, 1997, the Company sold the assets of Bear Medical Systems, Inc.
("Bear")  and  its  subsidiary  BiCore  Monitoring  Systems,  Inc.  ("BiCore"),
collectively  referred  to  as  the  ventilation  products  division,  to
Thermo-Electron  Corporation  for  $36.6  million plus the assumption of certain
liabilities.  The  net  proceeds of $29.5 million, after expenses which included
federal  and state taxes paid, were utilized to pay a significant portion of the
Company's subordinated debt.  The sale of the ventilation products division also
resulted  in a gain, for financial reporting purposes, of $12.8 million pre-tax,
$3.5  million  after  tax,  or  $0.45  per share for the six month period ending
December  31,  1997.

During  the  second quarter of fiscal 1998, the Company reevaluated the carrying
value  of  its  various  businesses  and  recorded $9.8 million of non-recurring
charges to reflect the changes in business conditions resulting from the sale of
the  ventilation products division and due to other changes in market conditions
which culminated during the second quarter of fiscal 1998.  Goodwill writedowns,
which  were determined pursuant to the Company's impairment policy, totaled $8.9
million.  As  a result of the carrying value of goodwill for certain businesses,
the Company reduced its annual amortization charges by $0.3 million or $0.04 per
share.

Loss  from  operations  was $2.6 million for the three months ended December 31,
1998  compared  to  income  from operations of $3.5 million for the three months
ended  December  30,  1997.

Interest  expense decreased $0.8 million or 63.4%, to $0.4 million for the three
months  ended December 31, 1998 from $1.2 million in the prior year same period.
Interest  expense  has  been  significantly  reduced  in the first six months of
fiscal  1999,  as  compared  to  the first six months of fiscal 1998, due to the
reduction  of  debt  from  the  proceeds  of  sale  of  the ventilation products
division.  In addition, interest expense for the three months ended December 31,
1997  included  $0.4  million for the full amortization of loan costs related to
the  portion  of  debt that was paid down with the proceeds from the sale of the
ventilation  products  division.  On  August  7,  1998 the Company borrowed $5.0
million  from  a  financial  institution at a fixed rate of 7.75%, with proceeds
used  to pay down existing higher rate debt.  On September 8, 1998 the Company's
credit  facilities  with  Foothill  Capital  Corporation were amended to further
reduce  interest  rates.  The  new  financial  agreements  are discussed further
below.

                                       19
<PAGE>
Allied  had  a  loss  before  benefit  for income taxes in the second quarter of
fiscal 1999 of $3.1 million compared to income before provision for income taxes
of $2.2 million for the second quarter of fiscal 1998.  Accordingly, the company
recorded a tax benefit of $1.1 million for the three month period ended December
31,  1998.  In  comparison, the Company recorded a provision for income taxes of
$8.9  million  in the second quarter of fiscal 1998, due to the gain on the sale
of  the  ventilation  products  division  and  the  non-deductibility of certain
goodwill  writedowns  included  in  the  non-recurring  charge  as  previously
discussed.

In  fiscal  1999, the net loss for the second quarter was $1.9 million, or $0.25
per  basic  and  diluted  share.  In  fiscal  1998,  the net loss for the second
quarter  was  $6.7  million, or $0.86 per basic and diluted share.  The weighted
average  number of common shares outstanding used in the calculation of earnings
per  share for the second quarters of fiscal 1999 and fiscal 1998 was 7,806,682.

SIX  MONTHS  ENDED  DECEMBER  31, 1998 COMPARED TO SIX MONTHS ENDED DECEMBER 31,
--------------------------------------------------------------------------------
1997.
-----

Allied  had  net  sales  of  $35.0 million for the six months ended December 31,
1998, down $19.2 million, or 35.5%, from net sales of $54.2 million in the prior
year  first  six months.  $10.4 million of this decrease was attributable to the
now divested ventilation products division. Base business sales declined by $8.8
million  or  20.2%.  Certain  internal  and  external  factors have continued to
impact  the  Company's  operations,  including  the  impact  of  healthcare cost
containment  and  Medicare  reimbursements,  economic  problems  in  Asia  and a
reduction  in  sales  of  purchased  products  for  home  care sales, especially
aluminum  cylinders,  due  to  company's emphasis on improved margins.  Allied's
previously  announced  decision  to move its B&F Medical operations from Toledo,
which  was completed during the second quarter of fiscal 1999, has significantly
impacted sales from that operation.  The Company experienced production problems
at  its  St. Louis facility during the first six months of fiscal 1999 that were
not  resolved  in  a  timely manner.  Most of these production problems have now
been  resolved  and  the  Company  is  rapidly  gaining  proficiency  in  the
manufacturing  of  B&F  products  in  St.  Louis.

Medical  gas  equipment  sales  in  the first six months of fiscal 1999 of $18.2
million  were  $4.6  million, or 20.3%, lower than sales of $22.8 million in the
prior  year  first six months.  Headwall sales declined from $2.6 million in the
first  six  months  of  fiscal  1998  to $2.0 million in the first six months of
fiscal  1999  due  to  a  lower  level  of  bookings  last  year.  Medical  gas
construction  sales declined from $9.6 million in the first six months of fiscal
1998  to  $7.3 million in the first six months of fiscal 1999, while medical gas
suction  and  regulation  device sales decreased from $10.6 million in the first
six  months  of  fiscal  1998  to $8.9 million in the first six months of fiscal
1999.  Both product lines experienced production problems and the six month over
six month comparisons were affected by an increase in shipments during the first
quarter  of  fiscal 1998 as a result of an interruption in production due to the
labor  strike  in  June,  1997.

                                       20
<PAGE>
Respiratory  care  product sales in the first six months of fiscal 1999 of $12.2
million  were $13.6 million, or 52.9%, under sales of $25.8 million in the prior
year  same  six month period.  $10.4 million of this decline was attributable to
the  sale of the ventilation products division while $3.2 million of the decline
relates  to  remaining product lines.  Home care sales declined 26.2% from $11.7
million  to  $8.6  million  due  to  the  relocation  of  the  Toledo  facility.

Emergency product sales declined 17.2% from $5.6 million in the first six months
of  fiscal  1998  to $4.6 million in the first six months of fiscal 1999, due to
the  benefit of a large order in the prior year same six month period and due to
the  suspension  in the shipments of aluminum regulators affected by the recall.

Orders for the first six months ended December 31, 1998 were $39.1 million, down
$15.6  million  from  the  prior  year  same  six month period.  Excluding $12.2
million  in  orders from the ventilation products division, base business orders
declined  $3.4  million  or 8.0%.  Emergency product orders decreased 13.0% from
$6.3  million  to  $5.5 million, primarily because of a large $0.9 million order
for  emergency  products  last year that did not recur this year.  Total medical
gas  equipment orders were $20.3 million for the six month period ended December
31,  1998, or 2.2% higher than orders of $19.8 million for the six months  ended
December 31, 1997.  Respiratory care product orders, for base business excluding
ventilation  products,  declined 18.3% from $16.4 million to $13.4 million. Home
care  orders  declined  24.0%  from $12.7 million to $9.7 million due to factors
indicated  earlier while respiratory care product orders for the hospital market
increased  1.4%  to $3.7 million partly due to orders for Company's new Respical
calibration device.  The Company's backlog now stands at $21.0 million, up 20.7%
from  the  fiscal  1998  year  end  level  of  $17.4  million.

International  sales,  which  are included in the product lines discussed above,
decreased  $9.6  million,  or  59.7%, to $6.4 million in the first six months of
fiscal  1999  from  $16.0  million in the prior year same period.  International
sales  declined  $6.9  million  due  to  the  sale  of  the ventilation products
division,  while the base business international sales declined by $2.7 million,
or  29.0%.  The  continued  uncertainty  in Asia, Russia and South America, have
reduced  international sales and orders.  The Company continues to emphasize the
importance  of  worldwide  markets  as  advances  in medical protocol in various
markets throughout the world will lead to increased demand for medical products.

Gross  profit  for  the  six months ended December 31, 1998 was $7.8 million, or
22.4%  of net sales compared to a gross profit of $16.0 million, or 29.5% of net
sales  for  the  six  months  ended  December  31,  1997.  Reduced manufacturing
throughput  due to B&F relocation and lower absorption of plant overhead, due to
lower  sales  volume,  has  further  reduced  margins as a percent to net sales.
Pricing  pressures  brought  on  by  consolidations  and cost containment in the
industry continue to impact margins as a percent to net sales.  In addition, the
sale  of  the  high  margin ventilation products division adversely impacted the
gross  profit comparison of the first six months of fiscal 1999 to the first six
months  of  fiscal  1998.  Results  of  the  ventilation  products  division are
included  for  four  months  in  the  six  months  ended  December  31,  1997.

                                       21
<PAGE>
Selling,  General and Administrative  ("SG&A") expenses for the six months ended
December  31,  1998 were $9.6 million, a decrease of $4.0 million, or 29.3% from
$13.6  million  for the six months ended December 31, 1997.  Of the $4.0 million
decline,  $2.4  million  is directly attributable to the sale of the ventilation
products  division,  $0.2  million  is  attributable  to a reduction in goodwill
amortization  resulting  from the writedown of goodwill in fiscal 1998, and $1.4
million  is  attributable  to  spending  reductions  in  the base business SG&A.

On  August  10,  1998  the  Company  announced its intention to close the Toledo
facility  of  its disposable products division and relocate the B&F product line
of  home  care  products  to its St. Louis manufacturing facility.  The move was
substantially completed during the second quarter of fiscal 1999.  In connection
with  the  shutdown  of  the facility, the Company recorded a one-time charge of
approximately  $1.0 million ($0.6 million after taxes), or $.07 per share during
the  first  quarter  of  fiscal 1999. Subsequently, during the second quarter of
fiscal  1999,  the  company  negotiated and received a $0.2 million cash payment
from  the  City  of  Toledo  as  partial  reimbursement  for  relocation  costs.
Accordingly,  Allied recorded this cash payment, in the second quarter of fiscal
1999,  as  a reduction to the aforementioned provision resulting in a net charge
of  $0.8 million pre-tax, $0.5 million after tax, or $0.06 per share for the six
months  ended  December  31,  1998.  See Note 5 in the Notes to the Consolidated
Financial  Statements  for  additional information concerning the details of the
Company's  restructuring  provision,  including  a reconciliation of the reserve
relating  thereto.

On  October  31, 1997, the Company sold the assets of Bear Medical Systems, Inc.
("Bear")  and  its  subsidiary  BiCore  Monitoring  Systems,  Inc.  ("BiCore"),
collectively  referred  to  as  the  ventilation  products  division,  to
Thermo-Electron  Corporation  for  $36.6  million plus the assumption of certain
liabilities.  The  net  proceeds of $29.5 million, after expenses which included
federal  and state taxes paid, were utilized to pay a significant portion of the
Company's subordinated debt.  The sale of the ventilation products division also
resulted  in a gain, for financial reporting purposes, of $12.8 million pre-tax,
$3.5  million  after  tax,  or  $0.45  per share for the six month period ending
December  31,  1997.

During  the  second quarter of fiscal 1998, the Company reevaluated the carrying
value  of  its  various  businesses  and  recorded $9.8 million of non-recurring
charges to reflect the changes in business conditions resulting from the sale of
the  ventilation products division and due to other changes in market conditions
which culminated during the second quarter of fiscal 1998.  Goodwill writedowns,
which  were determined pursuant to the Company's impairment policy, totaled $8.9
million.  As  a result of the carrying value of goodwill for certain businesses,
the Company reduced its annual amortization charges by $0.3 million or $0.04 per
share.

Loss from operations was $4.0 million for the six months ended December 31, 1998
compared  to  income  from  operations  of $5.4 million for the six months ended
December  30,  1997.

                                       22
<PAGE>
Interest  expense  decreased  $2.1 million or 68.2%, to $1.0 million for the six
months  ended  December  31,  1998  from $3.1 million in the prior year same six
month  period.  Interest expense has been significantly reduced in the first six
months  of  fiscal 1999, as compared to the first six months of fiscal 1998, due
to  the  reduction of debt from the application of the proceeds from the sale of
the  ventilation  products  division.  In addition, interest expense for the six
months  ended  December 31, 1997 included $0.4 million for the full amortization
of  loan  costs  related  to  the  portion  of  debt that was paid down with the
proceeds  from  the sale of the ventilation products division. On August 7, 1998
the  Company  borrowed $5.0 million from a financial institution at a fixed rate
of  7.75%,  with  proceeds  used  to  pay  down  existing  higher rate debt.  On
September  8,  1998  the  Company's  credit  facilities  with  Foothill  Capital
Corporation  were  amended  to further reduce interest rates.  The new financial
agreements  are  discussed  further  below.

Allied  had  a  loss  before benefit for taxes in the first six months of fiscal
1999  of  $5.0  million  compared  to  income  before  provision  for  taxes and
extraordinary  loss  of  $2.3  million  for the first six months of fiscal 1998.
Accordingly,  the  company  recorded  a  tax benefit of $1.9 million for the six
month  period  ended  December  31, 1998.  In comparison, the Company recorded a
provision  for  income  taxes  of $9.1 million in the first six months of fiscal
1998,  due  to the gain on the sale of the ventilation products division and the
non-deductibility  of  certain goodwill writedowns included in the non-recurring
charge  as  previously  discussed.

In  the  first  quarter of fiscal 1998, Allied recorded an extraordinary loss on
early  extinguishment  of  debt  of  $0.5  million, net of a tax benefit of $0.4
million.  In  fiscal  1999,  the  net  loss  for  the  first six months was $3.2
million,  or  $0.41  per  basic  and diluted share, consisting of $0.23 loss per
share  from  operations  and  $0.18  loss  per share related to B&F move and the
regulator  recall.  In  fiscal  1998,  the net loss for the first six months was
$7.3 million, or $0.94 per basic and diluted share, consisting of $0.87 loss per
share  from operations and $0.07 loss per share for the extraordinary item.  The
weighted  average number of common shares outstanding used in the calculation of
earnings  per  share  was  7,806,682  and  7,803,389 for the first six months of
fiscal  1999  and  fiscal  1998,  respectively.

                                       23
<PAGE>
FINANCIAL  CONDITION
--------------------

The  following  table  sets  forth  selected  information  concerning  Allied's
financial  condition:

Dollars in thousands:  December 31, 1998  June 30, 1998
---------------------  -----------------  -------------

Cash                   $             656  $       1,195
Working  Capital       $          20,923  $      21,308
Total  Debt            $          15,960  $      18,415
Current  Ratio                    2.95:1         2.67:1

The Company's working capital was $20.9 million at December 31, 1998 compared to
$21.3  million  at  June  30,  1998.  Decreases  in  accounts  receivable  and
inventories  along  with  an increase in accounts payable and the aforementioned
accrual for product recall, were partially offset by an increase in income taxes
receivable  and  decreases in accrued income taxes and other current liabilities
to  account  for  the  decrease  in  net working capital.  This reduction of net
working  capital  coupled  with  the  proceeds  from  the sale of the disposable
products  division  facilities  accounts  for  the  reduction  in  the Company's
long-term  debt.  Accounts receivable decreased to $12.7 million at December 31,
1998  from  $14.2 million at June 30, 1998.  The decrease in Accounts receivable
was  due  to  decreased  sales.  Accounts  receivable  as measured in days sales
outstanding  ("DSO")  increased  slightly  to  70  days  during  this  period.
Inventories  decreased  to  $17.0  million  from $18.3 million at June 30, 1998.
Inventories,  as  measured by Days on Hand ("DOH"), were 155 DOH at December 31,
1998  compared to 129 DOH at June 30, 1998, due to lower sales in the first half
of fiscal 1999 than in the fourth quarter of fiscal 1998.  The Company continues
to  focus  on  improving the mix of inventories and has been increasing stocking
levels  of high volume products while simultaneously reducing stocking levels of
low  volume  products.

                                       24
<PAGE>
The net increase / (decrease) in cash for the six months ended December 31, 1998
and  December  31,  1997 was ($0.5) million and $0.4 million, respectively.  Net
cash  (used by) / provided by operations was $1.3 million and ($2.7) million for
the  same periods, respectively.  Cash provided by operations for the six months
ended  December  31,  1998  consisted  of  a net loss of $3.2 million, which was
offset  by  non-cash  charges to operations of $2.0 million for depreciation and
amortization, as well as changes in working capital accounts which provided $0.7
million.  The  change in working capital was comprised of reductions in accounts
receivables  of $1.5 million, inventory of $1.3 million, other current assets of
$0.1  million,  and  an  increase  in  accounts  payable  of $0.2 million. These
favorable  cash  adjustments  were  partially offset by a net change in deferred
income  tax  accounts  of  ($1.9)  million  and  a  reduction  in  other current
liabilities  of  ($0.5)  million.  In  addition,  cash  provided  by  operating
activities  was  favorably  impacted  by  the  $1.5  million accrual for product
recall, as discussed previously, and by the $0.3 million non-cash portion of the
provision  for  restructuring and consolidation related to the relocation of the
B&F  product  line  from  Toledo,  Ohio  to  St.  Louis,  Missouri.

In  addition  to  cash  provided by operations in the first six months of fiscal
1999,  the  Company  received  proceeds from the sale of its disposable products
division  facilities which were sold to the City of Toledo for $1.4 million. The
aforementioned  cash  provided  by  operations and proceeds from the sale of the
Toledo,  Ohio  facilities were used to fund $0.7 million in capital expenditures
and  to  reduce  commercial  debt  by  $2.5  million.

Cash used by operations in the prior year same period consisted of a net loss of
$7.3  million  which  was  offset  by the non-cash charges to operations of $2.9
million for depreciation and amortization, as well as changes in working capital
accounts  which  used  $4.1  million. The change in working capital accounts was
principally  related  to  payments  to vendors which reduced accounts payable by
$2.9  million  during  the  first  six  months of fiscal 1998.  In addition, the
Company  reported  a  $12.8 million gain on the sale of the ventilation products
division  and also recorded non-recurring charges, of which the non-cash portion
was  $9.5  million for the six months ended December 31, 1997.  Accordingly, the
Company  recorded  a  tax  provision for the gain on the sale of the ventilation
products  division which resulted in an adjustment to cash provided by operating
activities  of  $9.4  million.  Also  in  conjunction  with  the  sale  of  the
ventilation  products  division,  the company received pre-tax proceeds of $36.0
million  which was used to reduce total debt by $31.5 million, pay debt issuance
costs  of  $1.0  million  and  make  capital  expenditures  of  $0.5  million.
Therefore,  for  the six months ended December 30, 1997, net cash increased $0.4
million.

On  August  7,  1998,  the  Company obtained a $5.0 million mortgage loan on its
principal  facility  in  St.  Louis, Missouri from LaSalle National Bank.  Under
terms  of  this  agreement  the Company will make monthly principal and interest
payments,  with  a  balloon  payment in 2003.  Proceeds of the loan were used to

                                       25
<PAGE>
reduce the obligation under the revolving credit agreement with Foothill Capital
Corporation.  The  mortgage  loan  carries  a  fixed  rate of interest of 7.75%,
compared  to  a  current  rate  of  8.5%  under  the revolving credit agreement.

On  September  8,  1998,  the  Company's credit facilities with Foothill Capital
Corporation  were  amended.  The Company's existing term loan was eliminated and
replaced  with  an amended revolving credit facility.  As amended, the revolving
credit  facility  remained  at $25.0 million.  The interest rate on the facility
has  been  reduced  from the floating reference rate (7.75% at January 31, 1999)
plus  0.50%  to  the  floating reference rate plus 0.25%.  The reference rate as
defined  in  the  credit agreement, is the variable rate of interest, per annum,
most  recently announced by Norwest Bank Minnesota, National Association, or any
successor thereto, as its "base" rate.  This amendment also provides the Company
with  a  rate  of  LIBOR +2.5%.  Amounts outstanding under this revolving credit
facility,  which  expires on August 8, 2000, totaled $8.5 million at January 31,
1999.  At  January  31,  1999,  $6.7  million  was available under the revolving
facility  for  additional  borrowings.

The  rates  noted above will drop by 0.25% at the end of fiscal 1999 and 2000 if
the  Company  is  profitable.  In  addition, the fees charged to the Company are
also  reduced.

As  of December 31, 1998 the Company had a backlog of  $21.0 million compared to
a  backlog  of  $17.4  million  at  June  30,  1998.  The  Company's  backlog, a
significant  portion  of  which  is  attributable  to  the Company's medical gas
equipment  products,  consist  of  firm  customer  purchase  orders which may be
subject  to  cancellation  by  the  customer.

Inflation  has not had a material effect on the Company's business or results of
operations.

YEAR  2000
----------

The Company utilizes software and related computer technologies essential to its
operations.  The Company has established a plan, utilizing internal resources to
assess  the  potential  impact  of  the  year  2000 on the Company's systems and
operations  and  to  implement solutions to address this issue. In October 1996,
the Company converted its corporate offices and its manufacturing operation to a
new  fully-integrated  software  system.   The company plans to install the most
recent  version  of  this  software, which the vendor has certified as year 2000
compliant,  by June 1999.  The Company views this as a normal, scheduled upgrade
of  software.  It  has  not been necessary to upgrade the software at an earlier
date  than  anticipated  to  assure  year 2000 compliance.  New equipment is not
required  to  upgrade software to the new version, certified by the vendor to be
year 2000 compliant.  The Company expects all critical systems will be year 2000
compliant  by  June 1999. Work on the upgrade is in process and the schedule for
upgrades is being met.   The date methodology of the current version software is
not  sensitive  to  year 2000 problems, therefore, if the software upgrade could
not  be  installed,  the  Company  would not anticipate a problem with year 2000

                                       26
<PAGE>
compliance.  The  cost  of  upgrading  to  a  year 2000 compliant version of the
existing  system  is not expected to be significant.  As of January 31, 1999 the
Company  had expended no funds specifically to assure year 2000 compliance.  The
Company  does  not  expect  to  expend  funds  specifically  to assure year 2000
compliance.

The  Company  is  dependent  on  various  third  parties to conduct its business
operations.  These third parties are vendors of raw material and components used
in  the production process.  The Company does not anticipate that the failure of
mission  critical  third  parties  would have a material effect on the Company's
operations.  None  of  the  Company's products or components of Company products
use  date  sensitive  technology. The Company employs a large number of vendors,
without  concentration  of  critical vendors.  The Company believes that vendors
could  be  replaced  if  they  fail to meet the Company's demand for components.
However,  there  can  be  no  assurance  that  the  Company  will not experience
unanticipated  costs  and/or business interruptions due to year 2000 problems in
its  internal  systems,  or  those  of  its  vendors, and that such costs and/or
interruptions  will  not  have  a  material  adverse  effect  on  the  Company's
consolidated  results  of  operations.

                                       27
<PAGE>
PART  II.     OTHER  INFORMATION
              ------------------

Item  6.     Exhibits  and  Reports  on  Form  8-K

(a)  Exhibits:

     (27)  Financial  Data  Schedule

(b)  Reports  on  Form  8-K  -  See  Form  8-K  filed  February  4,  1999.



                                       28
<PAGE>
                                    SIGNATURE

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                                       ALLIED  HEALTHCARE  PRODUCTS,  INC.



Dated:  02/12/1999           By:  /s/  Uma  Nandan  Aggarwal
                                ------------------------------------------------

                                       Uma  Nandan  Aggarwal
                                       President  and  Chief  Executive  Officer



                                       29
<PAGE>