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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2008
 o
    
    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.
 
  þ o
  Large accelerated filer
o
    
    Accelerated filer
o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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INDEX
 PageNumberPart I 
    
    Financial InformationItem 1.
    
    Financial StatementsConsolidated Statement of Operations -
three months and nine months ended March 31,
2008 and 2007 (Unaudited)
    
    
    3Consolidated Balance Sheet -
March 31, 2008 (Unaudited) and
June 30, 2007
    
    4  5Consolidated Statement of Cash Flows -
Nine months ended March 31, 2008 and 2007
(Unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    7  10Item 2.
    
    Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    10  16Item 3.
    
    Quantitative and Qualitative Disclosure
about Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    16Part II 
    
    Other InformationItem 6.
    
    Exhibits
    
    
    17Signature
    
    
    18Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial OfficerPress Release
    2




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
 Three months ended
    
    
    Nine months endedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    13,943,852
    
    
    $
    13,703,784
    
    
    $
    41,671,485
    
    
    $
    42,455,176Cost of sales
    
    
    10,779,631
    
    
    
    10,251,494
    
    
    
    32,428,408
    
    
    
    31,966,606Gross profit
    
    
    3,164,221
    
    
    
    3,452,290
    
    
    
    9,243,077
    
    
    
    10,488,570Selling, general and
administrative expenses
    
    
    3,013,413
    
    
    
    3,003,928
    
    
    
    8,988,810
    
    
    
    9,286,343Income from operations
    
    
    150,808
    
    
    
    448,362
    
    
    
    254,267
    
    
    
    1,202,227Interest income
    
    
    (13,928
    )
    
    
    (25,844
    )
    
    
    (92,874
    )
    
    
    (82,071
    )Other, net
    
    
    9,241
    
    
    
    9,328
    
    
    
    35,504
    
    
    
    (34,551
    )(4,687
    )
    
    
    (16,516
    )
    
    
    (57,370
    )
    
    
    (116,622
    )Income before provision
for income taxes
    
    
    155,495
    
    
    
    464,878
    
    
    
    311,637
    
    
    
    1,318,849Provision for income taxes
    
    
    55,824
    
    
    
    187,198
    
    
    
    118,421
    
    
    
    546,381Net income
    
    $
    99,671
    
    
    $
    277,680
    
    
    $
    193,216
    
    
    $
    772,468Basic earnings per share
    
    $
    0.01
    
    
    $
    0.04
    
    
    $
    0.02
    
    
    $
    0.10Diluted earnings per share
    
    $
    0.01
    
    
    $
    0.03
    
    
    $
    0.02
    
    
    $
    0.10Weighted average shares
outstanding  basic
    
    
    7,883,577
    
    
    
    7,883,577
    
    
    
    7,883,577
    
    
    
    7,873,460Weighted average shares
outstanding  diluted
    
    
    8,122,888
    
    
    
    8,077,696
    
    
    
    8,117,684
    
    
    
    8,071,832
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ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
 (Unaudited)March 31,
    
    
    June 30,2008
    
    
    2007Current assets:Cash and cash equivalents
    
    $
    3,849,144
    
    
    $
    3,638,870Accounts receivable, net of allowances
of $340,000 and $460,000, respectively
    
    
    7,146,268
    
    
    
    7,251,767Inventories, net
    
    
    11,587,283
    
    
    
    12,999,472Other current assets
    
    
    451,250
    
    
    
    275,254Total current assets
    
    
    23,033,945
    
    
    
    24,165,363Property, plant and equipment, net
    
    
    10,223,948
    
    
    
    10,677,000Goodwill
    
    
    15,979,830
    
    
    
    15,979,830Other assets, net
    
    
    559,100
    
    
    
    496,127Total assets
    
    $
    49,796,823
    
    
    $
    51,318,320
  4




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ALLIED HEALTHCARE PRODUCTS, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS EQUITY
 (Unaudited)March 31,
    
    
    June 30,2008
    
    
    2007Current liabilities:Accounts payable
    
    $
    2,231,057
    
    
    $
    3,040,313Other accrued liabilities
    
    
    2,254,815
    
    
    
    2,508,820Deferred income taxes
    
    
    633,173
    
    
    
    882,001Deferred revenue
    
    
    465,000
    
    
    
    465,000Total current liabilities
    
    
    5,584,045
    
    
    
    6,896,134Deferred revenue
    
    
    1,588,750
    
    
    
    1,937,500Commitments and contingenciesStockholders equity:Preferred stock; $0.01 par value; 1,500,000 shares
authorized; no shares issued and outstanding
    
    
    
    
    
    
    Series A preferred stock; $0.01 par value; 200,000 shares
authorized; no shares issued and outstanding
    
    
    
    
    
    
    Common stock; $0.01 par value; 30,000,000 shares
authorized; 10,187,069 shares issued at March 31, 2008
and June 30, 2007; 7,883,577 shares outstanding at
March 31, 2008 and June 30, 2007
    
    
    101,871
    
    
    
    101,871Additional paid-in capital
    
    
    47,498,432
    
    
    
    47,441,163Retained earnings
    
    
    15,755,153
    
    
    
    15,673,080Less treasury stock, at cost; 2,303,492 shares at
March 31, 2008 and June 30, 2007
    
    
    (20,731,428
    )
    
    
    (20,731,428
    )Total stockholders equity
    
    
    42,624,028
    
    
    
    42,484,686Total liabilities and stockholders equity
    
    $
    49,796,823
    
    
    $
    51,318,320
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ALLIED HEALTHCARE PRODUCTS, INC.
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
 Nine months endedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    193,216
    
    
    $
    772,468Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    964,454
    
    
    
    922,901Stock based compensation
    
    
    57,269
    
    
    
    55,243Provision for doubtful accounts and sales
returns and allowances
    
    
    (110,894
    )
    
    
    (31,882
    )Deferred tax benefit
    
    
    (22,908
    )
    
    
    (19,237
    )Loss on disposition of equipment
    
    
    5,228
    
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    216,393
    
    
    
    680,173Inventories
    
    
    1,412,189
    
    
    
    (1,295,028
    )Other current assets
    
    
    (175,996
    )
    
    
    (144,900
    )Accounts payable
    
    
    (809,256
    )
    
    
    185,355Deferred revenue
    
    
    (348,750
    )
    
    
    (348,750
    )Other accrued liabilities
    
    
    (626,474
    )
    
    
    (396,857
    )Net cash provided by operating activities
    
    
    754,471
    
    
    
    379,486Cash flows from investing activities:Capital expenditures
    
    
    (509,197
    )
    
    
    (471,049
    )Purchase of intangible asset
    
    
    (35,000
    )
    
    
    Net cash used in investing activities
    
    
    (544,197
    )
    
    
    (471,049
    )Cash flows from financing activities:Stock options exercised
    
    
    
    
    
    
    81,090Excess tax benefit from exercise of stock options
    
    
    
    
    
    
    28,424Net cash provided by financing activities
    
    
    
    
    
    
    109,514Net increase in cash and cash equivalents
    
    
    210,274
    
    
    
    17,951Cash and cash equivalents at beginning of period
    
    
    3,638,870
    
    
    
    2,696,324Cash and cash equivalents at end of period
    
    $
    3,849,144
    
    
    $
    2,714,275
  6




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ALLIED HEALTHCARE PRODUCTS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
   Recent Accounting Pronouncements
     7




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March 31, 2008
    
    
    June 30, 2007Work-in progress
    
    $
    1,075,502
    
    
    $
    742,890Raw materials and component parts
    
    
    7,373,523
    
    
    
    8,544,226Finished goods
    
    
    4,165,125
    
    
    
    4,812,220Reserve for obsolete and excess
inventory
    
    
    (1,026,867
    )
    
    
    (1,099,864
    )$
    11,587,283
    
    
    $
    12,999,472
     8




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®
  9




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Three Months ended
    
    
    Nine Months endedMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Beginning balance
    
    $
    2,170,000
    
    
    $
    1,705,000
    
    
    $
    2,402,500
    
    
    $
    1,937,500Payment Received from
Abbott Laboratories
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revenue recognized
as net sales
    
    
    (116,250
    )
    
    
    (116,250
    )
    
    
    (348,750
    )
    
    
    (348,750
    )2,053,750
    
    
    
    1,588,750
    
    
    
    2,053,750
    
    
    
    1,588,750Less  Current portion
of deferred revenue
    
    
    (465,000
    )
    
    
    (465,000
    )
    
    
    (465,000
    )
    
    
    (465,000
    )$
    1,588,750
    
    
    $
    1,123,750
    
    
    $
    1,588,750
    
    
    $
    1,123,750
 ®
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 RESULTS OF OPERATIONS
 Three Months ended March 31, 2008 compared to three months ended March 31, 2007.
  10




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®
 ® th ® ® ®
   11




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Nine Months ended March 31, 2008 compared to nine months ended March 31, 2007.
   12




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®
 ® th ® ® ®
    13




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LIQUIDITY AND CAPITAL RESOURCES
      14




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Litigation and Contingencies
  Recent Accounting Pronouncements
    15




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Item 3. Quantitative and Qualitative Disclosure about Market Risk
   
 Item 4. Controls and Procedures
    16




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Item 6. Exhibits
  31.1
    
    Certification of Chief Executive Officer (filed herewith)31.2
    
    Certification of Chief Financial Officer (filed herewith)32.1
    
    Sarbanes-Oxley Certification of Chief Executive Officer (furnished herewith)*32.2
    
    Sarbanes-Oxley Certification of Chief Financial Officer (furnished herewith)*99.1
    
    Press Release dated May 12, 2008 announcing third quarter earnings*
 
 *
    
    Notwithstanding any incorporation of this Quarterly Report on Form 10-Q in any other filing by the
Registrant, Exhibits furnished herewith and designated with an asterisk (*) shall not be deemed
incorporated by reference to any other filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934 unless specifically otherwise set forth therein. 17




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ALLIED HEALTHCARE PRODUCTS, INC./s/ Daniel C. DunnDaniel C. DunnChief Financial OfficerDate: May 12, 2008
 18