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  March  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 April 30, 1998 is
7,806,682  shares.

<PAGE>
                                      INDEX


                                                                           Page
                                                                          Number
Part  I  -  Financial  Information

          Item  1.  Financial  Statements

                    Consolidated  Statement
                    of  Operations  -  three  months  and  nine  months        3
3                   ended March 31, 1998 and 1997 (Unaudited)

                    Consolidated    Balance  Sheets  -
                    March  31,  1998 (Unaudited) and                         4-5
                    June  30,  1997

                    Consolidated  Statements  of  Cash
                    Flow  -  nine  months ended                              6-7
                    March  31,  1998  and  1997  (Unaudited)

                    Consolidated  Statement  of  Changes
                    in  Stockholders'  Equity  for  nine  months
8
                    ended  March  31,  1998  (Unaudited)

                    Notes  to  Consolidated
                    Financial  Statements          (Unaudited)              9-10

          Item  2.  Management's  Discussion  and
                    Analysis  of  Financial  Condition                     11-22
                    and  Results  of  Operations

Part  II  -  Other  Information                                               23

          Item  6.     Exhibits  and  Reports  on  Form  8-k                  23

Signature                                                                     24

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


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

                                                Three months ended           Nine months ended
                                                     March 31,                    March 31,
                                             -------------------------  ----------------------------
                                                1998          1997          1998           1997
                                             -----------  ------------  -------------  -------------

<S>                                          <C>          <C>           <C>            <C>
Net sales . . . . . . . . . . . . . . . . .  $22,784,952  $30,465,975   $ 76,990,844   $ 87,988,350 
Cost of sales . . . . . . . . . . . . . . .   16,277,638   20,740,804     54,511,774     60,298,361 
                                             -----------  ------------  -------------  -------------

Gross profit. . . . . . . . . . . . . . . .    6,507,314    9,725,171     22,479,070     27,689,989 

Selling, general and
  administrative expenses . . . . . . . . .    5,407,382    8,143,489     18,982,113     24,754,757 
Gain on sale of business. . . . . . . . . .            0            0    (12,812,927)             0 
Non-recurring impairment losses . . . . . .            0            0      9,778,259              0 
                                             -----------  ------------  -------------  -------------


Income from operations. . . . . . . . . . .    1,099,932    1,581,682      6,531,625      2,935,232 

Other expenses:
  Interest expense. . . . . . . . . . . . .      492,828    1,731,777      3,565,228      4,255,952 
  Other, net. . . . . . . . . . . . . . . .       69,101       71,387        156,351        126,323 
                                             -----------  ------------  -------------  -------------

                                                 561,929    1,803,164      3,721,579      4,382,275 
                                             -----------  ------------  -------------  -------------

Income (loss) before provision
  (benefit) for income taxes and
  extraordinary loss. . . . . . . . . . . .      538,003     (221,482)     2,810,046     (1,447,043)

Provision (benefit) for income taxes. . . .      297,144       80,800      9,360,607       (411,050)
                                             -----------  ------------  -------------  -------------


Income (loss) before extraordinary loss . .      240,859     (302,282)    (6,550,561)    (1,035,993)

Extraordinary loss on early
  extinguishment of debt, net of
  income tax benefit of $373,191. . . . . .            0            0        530,632              0 
                                             -----------  ------------  -------------  -------------

Net income (loss) . . . . . . . . . . . . .  $   240,859    ($302,282)   ($7,081,193)   ($1,035,993)
                                             ===========  ============  =============  =============


Basic and diluted income (loss) per share:
  Income (loss) before extraordinary loss .  $      0.03       ($0.04)        ($0.84)        ($0.13)
  Extraordinary loss                                 ---          ---         ($0.07)           --- 
                                             -----------  ------------  -------------  -------------

Net income (loss) . . . . . . . . . . . . .  $      0.03       ($0.04)        ($0.91)        ($0.13)
                                             ===========  ============  =============  =============


Weighted average shares . . . . . . . . . .    7,806,682    7,796,682      7,804,471      7,796,682 
                                             ===========  ============  =============  =============
<FN>
                    See accompanying Notes to Consolidated Financial Statements.
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>

                          ALLIED HEALTHCARE PRODUCTS, INC.
                             CONSOLIDATED BALANCE SHEET
                                       ASSETS

                                                          March 31,      June 30,
                                                             1998          1997
                                                         ------------  ------------
<S>                                                      <C>           <C>
                                                          (Unaudited)
Current Assets:
   Cash . . . . . . . . . . . . . . . . . . . . . . . .  $  1,208,660  $    988,436
   Accounts receivable, net of allowance for doubtful
      accounts of $998,760 and $1,225,326, respectively    16,507,534    23,093,037
   Inventories. . . . . . . . . . . . . . . . . . . . .    20,180,297    26,052,991
   Other current assets . . . . . . . . . . . . . . . .        91,506     1,544,811
                                                         ------------  ------------

      Total current assets. . . . . . . . . . . . . . .    37,987,997    51,679,275
                                                         ------------  ------------

   Property, plant and equipment, net . . . . . . . . .    18,005,541    20,848,870
   Goodwill, net. . . . . . . . . . . . . . . . . . . .    28,229,917    50,763,511
   Deferred income taxes-noncurrent . . . . . . . . . .             0     1,665,069
   Other assets, net. . . . . . . . . . . . . . . . . .       652,187     1,386,291
                                                         ------------  ------------

      Total assets. . . . . . . . . . . . . . . . . . .  $ 84,875,642  $126,343,016
                                                         ============  ============
</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


                                                                    March 31,      June 30,
                                                                      1998           1997
                                                                  -------------  -------------
<S>                                                               <C>            <C>
                                                                    (Unaudited)
Current liabilities:
   Accounts payable. . . . . . . . . . . . . . . . . . . . . . .  $  6,484,197   $ 14,048,235 
   Current portion of long-term debt . . . . . . . . . . . . . .     2,594,532     12,890,772 
   Other current liabilities . . . . . . . . . . . . . . . . . .     5,142,425      5,997,670 
                                                                  -------------  -------------

      Total current liabilities. . . . . . . . . . . . . . . . .    14,221,154     32,936,677 
                                                                  -------------  -------------

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . .    17,667,043     34,041,300 

Deferred income tax liability-noncurrent . . . . . . . . . . . .       634,849              0 

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 and 7,796,682 shares issued
    and outstanding at March 31, 1998 and
    June 30, 1997, respectively. . . . . . . . . . . . . . . . .       101,102        101,002 
   Additional paid-in capital. . . . . . . . . . . . . . . . . .    47,014,621     46,945,971 
   Common stock in treasury, at cost . . . . . . . . . . . . . .   (20,731,428)   (20,731,428)
   Retained earnings . . . . . . . . . . . . . . . . . . . . . .    25,968,301     33,049,494 
                                                                  -------------  -------------

      Total stockholders' equity . . . . . . . . . . . . . . . .    52,352,596     59,365,039 
                                                                  -------------  -------------

      Total liabilities and stockholders' equity . . . . . . . .  $ 84,875,642   $126,343,016 
                                                                  =============  =============
</TABLE>



          See accompanying Notes To Consolidated Financial Statements.

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

                                                                 Nine months ended
                                                                     March 31,
                                                            --------------------------
                                                                1998          1997
                                                            ------------  ------------
<S>                                                         <C>           <C>
Cash flows from operating activities:
   Net loss. . . . . . . . . . . . . . . . . . . . . . . .  ($7,081,193)  ($1,035,993)
   Adjustments to reconcile net loss to net
       cash provided by (used in) operating activities:

      Depreciation and amortization. . . . . . . . . . . .    3,916,961     4,088,674 
      Gain on sale of Bear Medical . . . . . . . . . . . .  (12,812,927)            0 
      Loss on refinancing of long-term debt. . . . . . . .      903,823             0 
      Noncash portion of non-recurring impairment losses .    9,572,390             0 
      Decrease (increase) in accounts receivable, net. . .      607,124      (359,597)
      Decrease in inventories. . . . . . . . . . . . . . .      573,594       561,651 
      Decrease in income taxes receivable. . . . . . . . .            0     1,354,681 
      Decrease in deferred income taxes - asset. . . . . .    2,001,014             0 
      Decrease (increase) in other current assets. . . . .      542,437       (36,361)
      Decrease in accounts payable . . . . . . . . . . . .   (6,070,629)     (645,033)
      Increase in accrued income taxes . . . . . . . . . .    1,776,585             0 
      Decrease in other current liabilities. . . . . . . .   (1,818,329)     (728,843)
      Increase in deferred income taxes - liability. . . .      634,849             0 
                                                            ------------  ------------

       Net cash provided by (used in) operating activities   (7,254,301)    3,199,179 
                                                            ------------  ------------


Cash flows from investing activities:
   Capital expenditures, net . . . . . . . . . . . . . . .     (420,143)   (1,790,106)
   Proceeds on sale of Bear Medical, net of disposal costs   35,378,957             0 
                                                            ------------  ------------

       Net cash provided by (used in) investing activities   34,958,814    (1,790,106)
                                                            ------------  ------------

</TABLE>






                                   (CONTINUED)

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

                                                          Nine months ended
                                                              March 31,
                                                    -----------------------------
                                                         1998           1997
                                                    --------------  -------------
<S>                                                 <C>             <C>
Cash flows from financing activities:
   Proceeds from issuance of long-term debt. . . .     26,000,000      5,000,000 
   Payments of long-term debt. . . . . . . . . . .    (36,747,627)    (1,652,664)
   Borrowings under revolving credit agreement . .    106,514,530     19,499,516 
   Payments under revolving credit agreement . . .   (122,358,410)   (23,565,161)
   Issuance of common stock. . . . . . . . . . . .         68,750              0 
   Debt issuance costs . . . . . . . . . . . . . .       (961,532)      (669,667)
   Dividends paid on common stock. . . . . . . . .              0       (545,768)
                                                    --------------  -------------

       Net cash used in financing activities . . .    (27,484,289)    (1,933,744)
                                                    --------------  -------------


   Net increase (decrease) in cash and equivalents        220,224       (524,671)
   Cash and equivalents at beginning of period . .        988,436      1,489,133 
                                                    --------------  -------------

   Cash and equivalents at end of period . . . . .  $   1,208,660   $    964,462 
                                                    ==============  =============



Supplemental disclosures of cash flow information:
   Cash paid during the period for:
       Interest. . . . . . . . . . . . . . . . . .  $   4,213,765   $  4,349,287 
       Income taxes. . . . . . . . . . . . . . . .  $   4,140,629   $     77,962 
</TABLE>






          See accompanying Notes To Consolidated Financial Statements.

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





                                                Additional
                          Preferred    Common     paid-in      Treasury       Retained
                            stock      stock      capital        stock        earnings
                          ----------  --------  -----------  -------------  ------------
<S>                       <C>         <C>       <C>          <C>            <C>
Balance, June 30, 1997 .  $        0  $101,002  $46,945,971  ($20,731,428)  $33,049,494 

Issuance of common stock                   100       68,650
Net loss for the
   nine months ended
   March 31, 1998                                                            (7,081,193)
                          ----------  --------  -----------  -------------  ------------

Balance,
   March 31, 1998. . . .  $        0  $101,102  $47,014,621  ($20,731,428)  $25,968,301 
                          ==========  ========  ===========  =============  ============
</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, 1997.

          The  Company  adopted  the  provisions  of  Statement  of  Financial
Accounting  Standards  No.  128 "Earnings Per Share" ("FAS 128"), in the quarter
ended December 31, 1997.  FAS 128 requires the presentation of basic and diluted
earnings  per  share.    The  effect of adopting FAS 128 was not material to the
reported  earnings  and  loss  per  share  amounts in the accompanying financial
statements.
          -

2.    Inventories

          Inventories  are  comprised  as  follows:

<TABLE>
<CAPTION>
                    March 31,     June 30,
                      1998          1997
                  (Unaudited)
<S>               <C>          <C>
Work-in-progress  $   984,612  $ 2,726,585
Component Parts    15,621,825   18,679,482
Finished Goods      3,573,860    4,646,924
                  -----------  -----------
                  $20,180,297  $26,052,991
                  ===========  ===========
</TABLE>

     The above amounts are net of a reserve for obsolete and excess inventory of
approximately $2.1 million and $1.7 million at March 31, 1998 and June 30, 1997,
respectively.

     3.    Debt  Refinancing

          On  August  8, 1998 the Company refinanced its existing debt through a
new  $46.0 million credit facility with Foothill Capital Corporation (Foothill),
a  division  of  Norwest  Bank.    The  Foothill credit facility, with a blended
average  interest  rate  of  10.2%,  is  comprised of a $25.0 million three-year
revolving  line  of  credit,  three-year  term  loans  of $10.0 million and $7.0
million,  respectively,  and  a $4.0 million loan maturing in February 1998.  In
conjunction  with  the new financing agreement, Allied placed an additional $5.0
million  in  subordinated  debt  financing, also scheduled to mature in February
1998,  with  several  related  parties to the Company.  In addition, the Company
issued  112,500  warrants  with an exercise price of $7.025 per share, 62,500 of
which  were  issued  to  the  holders of the subordinated debt and the remaining
warrants were issued to Foothill.  In conjunction with the debt refinancing, the
Company  recorded  a  $0.5 million, net of taxes, extraordinary expense to write
off  the  unamortized  loan  costs  of  the  previous  credit  facility.

                                       9
<PAGE>
4.    Sale  of  Bear  Medical  Systems  and  BiCore  Monitoring  Systems

          On  October  31,  1997,  the  Company  sold the assets of Bear Medical
Systems  and  its  subsidiary  BiCore  Monitoring  Systems,  to  Thermo Electron
Corporation  for approximately $35.7 million, net of transaction costs, plus the
assumption  of  certain  liabilities,  resulting  in a one-time, pre-tax gain of
approximately $12.8 million.  The provision for income taxes associated with the
gain  on  sale of the business approximated $9.4 million.  The relatively higher
effective  tax  rate  on  the  transaction reflected the fact that approximately
$12.7  million  of  goodwill  associated with the business is not deductible for
income  tax  purposes.

          The  net  proceeds  of  approximately  $29.5 million after federal and
state  taxes  payable  of  approximately $6.1 million,  were utilized to repay a
significant  portion  of  the  Company's  term  notes  and  repay  all  of  its
subordinated  debt,  $15.8  million, which had a coupon rate of 14.0% per annum.

          Had  the  divestiture occurred on July 1, 1996, pro forma consolidated
net  sales,  net  loss  and basic and diluted loss per share for the nine months
ended  March  31,  1998  would have been $66.6 million, $10.9 million, and $1.40
per  share  respectively.   For the three months ended March 31, 1997, pro forma
consolidated net sales, net loss and basic and diluted loss per share would have
been  $23.6  million,  $0.5  million, and $0.06 per share respectively,  For the
nine  months  ended  March 31, 1997, pro forma consolidated net sales, net basic
and  diluted  loss  per  share  would have been $66.9 million, $1.7 million, and
$0.22  per  share  respectively.

          The  unaudited  pro  forma  information is based on assumptions deemed
appropriate  by  Allied Healthcare Products, Inc. and is not intended to reflect
what  the  Company's  net  sales,  net loss, or basic and diluted loss per share
would  have  been  had  the  sale  occurred  on  July  1, 1996 or to project the
Company's  results  of  operations  for  the  future.

5.    Non-Recurring  Items
      --------------------

          In  the  second  quarter  of  fiscal  1997,  non-recurring  items  of
$9,778,259  were  charged  to  operations.    These  items  included  $8,874,129
impairment  losses  relative  to goodwill for certain subsidiaries,  $403,530 in
connection  with  discontinuing operations in its Mt. Vernon, Ohio facility, and
$500,000  in  connection  with  the early termination of a consulting agreement.

          The  goodwill impairment provisions reflected the Company's evaluation
of  the  carrying value of its remaining business subsequent to the sale of Bear
and  BiCore  in  the  second  quarter of fiscal 1998.  Such goodwill writedowns,
which  were  determined  pursuant  to the Company's impairment accounting policy
described in Note 2 to the June 30, 1997 financial statements, primarily related
to  the Company's headwall and disposable products businesses, which continue to
experience  weakness in financial results due to a variety of market conditions.
Due  to  the  non-deductible  nature of these goodwill writedowns for income tax
reporting  purposes, the Company's effective income rate is substantially higher
in  the  nine  months  ended  March  31,  1998.

                                       10
<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 nine month
periods  ended March 31, 1998 compared to the three month and nine month periods
ended  March  31,  1997.  This discussion should be read in conjunction with the
June  30,  1997  and  March  31,  1998  consolidated  financial  statements  and
accompanying  notes  thereto  included in the Annual Report on Form 10-K for the
year  ended June 30, 1997 and this Quarterly Report on Form 10-Q for the quarter
ended  March  31,  1998,  respectively.

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 effect of currency
devaluations  and  recessionary conditions in certain Asian markets, the effects
of  federal  and state legislation on health care 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 results of operations for the first nine months of fiscal 1998 were affected
by several one time items as described further below, which were recorded in the
second  quarter.    On  October  31,  1997,  the  Company sold the assets of its
ventilation products division for a gain.  The proceeds from this sale were used
to significantly pay down debt and to provide additional liquidity.  The Company
also recorded several non-recurring items and other charges to operations in the
second  quarter  of  fiscal  1998.   Such non-recurring items reflect changes in
business conditions resulting from the sale of the ventilation products division
and  other  changes in market conditions.  In addition, reserves for inventories
and  bad debts were increased throughout the fiscal year the effect thereof, are
included  in  the  results  of  operations.    As  a  result,  the  Company  has
strengthened its balance sheet by reducing debt, reducing intangible assets, and
increasing  reserves.

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 zero
months and four months in the three month and nine month periods ended March 31,
1998  while  the  fiscal  1997  results  include  ventilation  products division
operations for the full three month and nine month periods ended March 31, 1997.

The  components  impacting  fiscal  1998  year  to date operating results are as
follows:

SALE  OF  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") to Thermo
Electron  Corporation  for  $36.6  million  plus  the  assumption  of  certain
liabilities.    The  net  proceeds  of  $29.5 million, after expenses, including
federal  and  state  taxes  accrued for and/or paid through March 31, 1998, were
utilized  to  repay  a significant portion of its term notes and to repay all of
its  subordinated  debt,  $15.8  million of which had a coupon rate of 14.0% per
annum.

                                       11
<PAGE>
The sale of these assets resulted in a gain before taxes for financial reporting
purposes  of  $12.8  million,  which  is  recorded  in  the Company's results of
operations  for  the  nine months ended March 31, 1998.  The gain on sale of the
ventilation  products  division, as a discrete item, resulted in a tax provision
of  $9.4  million.  The relatively higher effective tax rate on this transaction
reflected  the fact that approximately $12.7 million of goodwill associated with
these  businesses  is  not  deductible  for  income tax purposes. The net income
effect  of the gain on sale of business is income of approximately $3.4 million,
or  $0.43  per  share.

DEBT  REDUCTION
---------------

The  proceeds  from  the  gain on sale of the ventilation products division were
used  to  significantly pay down the Company's debt during the second quarter of
fiscal  1998.   The $36.6 million received from the sale of business was used to
reduce  the  Company's  commercial debt by $31.4 million, to pay $1.0 million of
expenses  associated  with  such sale and to pay the third quarter estimated tax
payment,  which  included  federal  and  state  taxes  due  on the gain, of $4.2
million.

Prior  to  the sale of the business the Company had $45.6 million in outstanding
commercial  and subordinated debt.  On November 3, 1997 , the Company repaid two
term  notes  totaling $10.8 million, which had a coupon rate of 14.0% per annum,
and  significantly  reduced  the  outstanding  balance  of its revolving line of
credit,  and on November 4, 1997 repaid $5.0 million of 14.0% subordinated debt.

NON-RECURRING  CHARGES
----------------------

During  the second quarter of fiscal 1998, the Company re-evaluated 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  product division and due to other changes in market conditions
discussed below, which culminated during the second quarter of fiscal 1998.  The
elements  comprising  the  $9.8  million  of  non-recurring  charges,  which are
included  in the results of operations for the nine months ended March 31, 1998,
are:

Goodwill  writedowns, which were determined pursuant to the Company's impairment
policy as described in Note 2 to the June 30, 1997 financial statements, totaled
$8.9  million  for  the  four  following  businesses:

     $4.4  million associated with the partial goodwill writedown related to the
       B&F  disposable  products  business.  Continuing  weakness  in  financial
       results  of  the  business  due to  market  condition changes in the home
       healthcare market including pressures  on  pricing, and  overall weakness
       in financial  results  of  the  national home  healthcare  chains  caused
       Allied  to  re-evaluate  and  adjust the carrying value of this business.

     $2.4 million associated with the partial writedown of goodwill for Allied's
       headwall  business  which continues  to  experience weakness in financial
       results due to market conditions.

                                       12
<PAGE>
     $1.6  million  associated  with  the  writedown  of Omni-Tech Medical, Inc.
       goodwill.  This transportation ventilator business is directly related to
       the  recently  sold  Bear  ventilation  products  division  and  is  not
       anticipated  to  contribute  to  the  ongoing  operations of the Company.

     $0.5  million  associated  with  the  write-down of goodwill for the Design
       Principles  Inc. backboard business.  Increased  costs have significantly
       eroded the margins  of  this business  necessitating  a  re-evaluation of
       the carrying value of its goodwill.

In  addition to the non-cash goodwill write-downs, the other non-recurring items
include:

     $0.5 million of consulting fees related to a co-operative purchasing study.

     $0.4  million  for the writedown of leasehold improvements and a reserve of
       the  remaining  lease  payments for B&F's Mt. Vernon, Ohio facility which
       was  closed  as  part  of the Company's rationalization initiatives.  The
       tenant  subletting  this  facility  is  operating  under  Chapter  11
       reorganization protection.

The  combined  tax  impact  of these non-recurring charges resulted in a minimal
$0.4  million tax benefit,  due to the non-deductibility for tax purposes of the
$8.9  million  of goodwill writedowns.  The non-recurring charges, as a discrete
item,  resulted  in  a net loss of approximately $9.4 million or a loss of $1.21
per  share.

As  a  result  of  the  writedown  of the carrying value of goodwill for certain
businesses  described  above,  the  Company  expects  to  reduce  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.

<TABLE>
<CAPTION>
                                                  Three Months Ended  Nine Months Ended
                                                         March 31,      March 31,
                                                       1998    1997    1998     1997
                                                      ------  ------  -------  ------
<S>                                                   <C>     <C>     <C>      <C>
Net Sales. . . . . . . . . . . . . . . . . . . . . .  100.0%  100.0%   100.0%  100.0%
Cost of sales. . . . . . . . . . . . . . . . . . . .   71.4    68.1     70.8    68.5 
                                                      ------  ------  -------  ------
Gross profit . . . . . . . . . . . . . . . . . . . .   28.6    31.9     29.2    31.5 
Total SG&A expenses. . . . . . . . . . . . . . . . .   23.7    26.7     24.7    28.1 
Gain on sale of business                          -.      -   (16.6)       - 
Non-recurring charges. . . . . . . . . . . . . . . .      -      -_     12.7     -__ 
                                                      ------  ------  -------  ------
Income from operations . . . . . . . . . . . . . . .    4.9     5.2      8.4     3.4 
Interest/other expense . . . . . . . . . . . . . . .    2.5     5.9      4.8     5.0 
                                                      ------  ------  -------  ------
Income (loss) before provision
     (benefit) for income taxes. . . . . . . . . . .    2.4    (0.7)     3.6    (1.6)
Provision (benefit) for income taxes . . . . . . . .    1.3    (0.3)   (12.1)   (0.5)
                                                      ------  ------  -------  ------
Net income (loss) before
        extraordinary item . . . . . . . . . . . . .    1.1    (1.0)    (8.5)   (1.1)
Extraordinary (loss) . . . . . . . . . . . . . . . .      -       -     (0.7)    -__ 
                                                      ------  ------  -------  ------
Net income . . . . . . . . . . . . . . . . . . . . .    1.1%  (1.0)%  ( 9.2)%  (1.1)%
                                                      ======  ======  =======  ======
</TABLE>

                                       13
<PAGE>
RESULTS  OF  OPERATIONS
-----------------------

Allied  manufactures  and  markets  medical  gas  equipment, respiratory therapy
equipment  and  emergency  medical  products.    Set  forth  below  is  certain
information  with  respect  to amounts (dollars in thousands) and percentages of
net  sales  attributable  to  these  product lines for the three months and nine
months  ended  March 31, 1998 compared to the three months and nine months ended
March  31,  1997.

<TABLE>
<CAPTION>
                                        Three Months Ended
                                March 31, 1998  March 31, 1997
                                         % of             % of
                                        total            total
                                 Net     net      Net     net
                                sales   sales    sales   sales
                               -------  ------  -------  ------
<S>                            <C>      <C>     <C>      <C>
Medical Gas Equipment . . . .  $12,167   53.4%  $11,384   37.4%
Respiratory Therapy Equipment    7,634   33.5%   16,073   52.7%
Emergency Medical Products. .    2,984   13.1%    3,009    9.9%
                               -------  ------  -------  ------
Total . . . . . . . . . . . .  $22,785  100.0%  $30,466  100.0%
                               =======  ======  =======  ======
</TABLE>

<TABLE>
<CAPTION>
                                        Three Months Ended
                                March 31, 1998  March 31, 1997
                                         %of              %of
                                        total            total
                                 Net     net      Net     net
                                sales   sales    sales   sales
                               -------  ------  -------  ------
<S>                            <C>      <C>     <C>      <C>
Medical Gas Equipment . . . .  $34,993   45.4%  $31,624   36.0%
Respiratory Therapy Equipment   33,456   43.5%   47,632   54.1%
Emergency Medical Products. .    8,542   11.1%    8,732    9.9%
                               -------  ------  -------  ------
Total . . . . . . . . . . . .  $76,991  100.0%  $87,988  100.0%
                               =======  ======  =======  ======
</TABLE>

Three months ended March 31, 1998 compared to three months ended March 31, 1997
-------------------------------------------------------------------------------

Net  sales  for the three months ended March 31, 1998 of $22.8 million were $7.7
million  below sales of $30.5 million for the three months ended March 31, 1997.
Of  the  $7.7  million  decline  in  sales,  $6.7  million  of  the  decline was
attributable  to  sales associated with the disposal of the ventilation products
division  and  $1.0  million  of  the decline relates to the Company's remaining
product  lines.    The  $1.0  million  decline  in  remaining product line sales
represents  a  4.1%  decline  from year to year.  Factors impacting sales in the
third quarter of fiscal 1998 include external and internal issues.  External, or
macro-economic  factors  include  the  continued  pricing  pressures on the home
healthcare  market  and  the  impact  of  the  Asian  currency  valuations  on
international  sales.  These external factors were partially offset by increases
in  domestic sales of medical gas products, which were ordered in prior periods,
and emergency products.  The internal factors include the short term disruptions
caused by the realignment of the Company's sales force subsequent to the sale of
the  ventilation  products  division  and continued refinements of manufacturing
processes  in  the  Toledo,  Ohio  facility.

                                       14
<PAGE>
New  orders,  or  the  pace of incoming business, of $22.5 million for the three
months  ended March 31, 1998 were $10.3 million below orders of $32.8 million in
the  prior  year  same period.  $6.8 million of this decline was attributable to
the  ventilation  products  division while $3.5 million of the decline in orders
relates to the remaining businesses.  This 13.4% decline in orders for remaining
product  lines  was  attributable  to  external  and internal factors previously
discussed  combined  with the decline in orders for medical gas construction and
headwall  products.  Order patterns for these products are volatile due to their
high  dollar  value  per order evidenced by several large bid orders received in
the  third  quarter  of  fiscal 1997 which did not repeat in the current period.
While  the  bid  activity  for these product lines remain unchanged in number of
bids,  the  value  of  the  bids,  on  average,  is lower than in prior periods.

Medical gas equipment sales in the third quarter of fiscal 1998 of $12.2 million
were  $0.8 million, or 6.9%, over medical gas equipment sales in the same period
prior  year  of  $11.4 million.  Medical gas suction and regulation device sales
increased  by  6.8% over the comparable prior year period, following a slow down
in  sales  in  the  second  quarter  of  fiscal 1998 due to soft demand in Asian
markets  and  a  planned  reduction of stocking status by the Company's domestic
distributors.    Headwall  sales, the smallest segment of medical gas equipment,
increased  64.0%  over the comparable period prior year sales on the strength of
orders  booked  in  prior  periods.   Partially offsetting these increases was a
decline  in medical gas construction products to $4.4 million from sales of $4.6
million  in  the  prior  year  comparable  period.

Orders for medical gas equipment products in the third quarter of fiscal 1998 of
$11.1  million were $3.3 million, or 23.0%, under orders of $14.4 million in the
third  quarter of fiscal 1997.  Medical gas construction and headwall orders are
subject  to  infrequent  large bid orders.  These products were below comparable
period prior year orders by 31.0% and 64.6%, respectively, primarily as a result
of  soft demand in both the domestic and Asian markets.  Medical gas suction and
regulation  devices,  which  are principally shipped in the same period in which
they  are  ordered,  experienced  a  6.0%  increase in orders.  This increase is
attributable  to  deferments  of  orders  for  this  product noted in the second
quarter  of  fiscal  1998,  as  previously  discussed.

     Respiratory  therapy equipment sales in the third quarter of fiscal 1998 of
$7.6  million  were $8.4 million below the prior year same period sales of $16.0
million.      $6.7  million  of this decline was attributable to the ventilation
products division while $1.7 million of the decline relates to remaining product
lines.    Sales to the home healthcare market declined by 23.4%, which primarily
reflected  a  reduction in sales of low margin aluminum cylinders and reductions
in  sales  due  to  competitive pressures in home health care hardgood products,
such  as  nebulizers  and aspirators.  Additionally, pricing pressures caused by
the  consolidation  of  home  healthcare  dealers  and  continued  concerns over
potential  reductions  in  home  oxygen therapy reimbursement rates continued to
impact  sales  of home healthcare products.  Current customer order patterns are
likely  to  continue  for  the foreseeable future.  Sales to the hospital market
remain relatively unchanged in the three months ended March 31, 1998 compared to
the  prior  year  same  period.      Plant  layout changes have begun to improve
manufacturing  efficiencies and throughput of disposable products in the Toledo,
Ohio  facility.   The new tooling for the disposable canister units has now been
placed in service which has resulted in improved fiscal 1998 third quarter sales
as  compared  to  the  previous  two  sequential quarters.  In addition, the new
Respical  calibration  device has been introduced in the third quarter of fiscal
1998.    Orders  of  respiratory therapy products in the third quarter of fiscal
1998  for  the Company's home health care products declined by 16.3% compared to
the  third  quarter of fiscal 1997 as a result of factors discussed above, while
hospital  orders increased 10.2% as a result of the new disposable canister unit
and  the  introduction  of  the  Respical  unit.

                                       15
<PAGE>
     Emergency medical product sales in the third quarter of fiscal 1998 of $3.0
million were relatively unchanged from the comparable prior year period.  Orders
for  emergency medical products increased to $3.5 million, or 22.0%, from orders
of $2.9 million in the comparable prior year period.  This increase in orders is
attributable  to  a  large  international  stocking  order for emergency medical
products.    In  addition,  enhancements  made  on two products improved product
quality  and  manufacturing  efficiencies.

     The  impact  of  the  Asian  currency  devaluation combined with the second
quarter  sale  of  the  ventilation  products  division  affected  the Company's
international  sales  in the third quarter of fiscal 1998.  International sales,
which  are included in the product line sales discussed above, were $3.4 million
for  the three months ended March 31, 1998, a decline of $5.3 million from sales
of  $8.7  million  for  the  three  months  ended March 31, 1997. The decline in
international  sales  includes  $4.2  million  resulting  from  the  ventilation
products  division.   Sales of core business products experienced a $1.1 million
decline  in  sales,  primarily attributable to soft demand in the Asian markets.
International  orders  of  core business products in the third quarter of fiscal
1998  were  58.3%  below  the  prior  year period international orders primarily
because  of  the  factor  previously  discussed.  As a result of the sale of the
ventilation  products  division and the decline in Asian markets, the percent of
the total net sales represented by the Company's international sales declined to
15.0% in the third quarter of fiscal 1998 compared to 28% in the same prior year
period.

     Gross  profit for the third quarter of fiscal 1998 of $6.5 million was $3.2
million  below  the  gross profit of $9.7 million in the third quarter of fiscal
1997.   Gross profit as a percent to net sales was 28.6% and 31.9% for the third
quarter  fiscal  1998 and fiscal 1997, respectively.  The disposal of the higher
margin ventilation products division impacted the gross margin as these products
were  not  part  of  the  Company's business in the third quarter of fiscal 1998
compared  to  the  full  three months of fiscal 1997.  In addition, margins were
reduced  by the continued pricing pressures brought on by the consolidations and
cost  containment  initiatives  of healthcare providers.   The Company's planned
reductions  in  inventories  resulted  in  reduced  manufacturing throughput and
absorption of plant overhead which also served to reduce margins as a percent to
net  sales.   To offset these margin pressure, the Company has stabilized prices
on  certain  products and  improved its sales mix due to a reduction in sales of
lower  margin  distributed  products.

     Selling,  General,  and  Administrative  ("SG&A")  expenses  for  the third
quarter  of  fiscal  1998 were $5.4 million, a decline of $2.7 million from SG&A
expenses  of  $8.1 million in the third quarter of fiscal 1997.  This decline is
primarily  attributable  to  the  sale of the ventilation products division.  In
addition  to  reductions in direct SG&A expenses associated with the ventilation
products  division,  the  Company has eliminated several sales management, sales
and  marketing,  and  other  administrative  positions  in  its post-divestiture
realignment  initiatives.   Partially offsetting these declines in SG&A expenses
were key investments in technology and human resources relative to manufacturing
operations.   The Company installed its upgraded computer systems in the Toledo,
Ohio  operations  and  also  incurred  recruitment  costs  to  fill  several key
operations  positions.    As  a  percent to net sales, SG&A expenses declined to
23.7% in the third quarter of fiscal 1998 compared to 26.7% in the third quarter
of  fiscal  1997.

     Income  from operations in the third quarter of fiscal 1998 of $1.1 million
was  $0.5  million  below  income  from  operations of $1.6 million in the third
quarter of fiscal 1997.  The decrease was attributable to the net effects of the
reduction  in sales and gross margins, which were partially offset by reductions
in  SG&A  expenses.  The sale of the ventilation products division resulted in a
net  reduction  in  income  from  operations,   but also result in significantly
reduced  debt  and  related  interest  costs  as  described  below.

                                       16
<PAGE>
     Interest  expense  for the third quarter of fiscal 1998 was $0.5 million, a
decrease  of  $1.2  million  from  interest expense of $1.7 million in the third
quarter  of  fiscal  1997.    The  decrease  is  attributable to the significant
reduction  in  debt  and  the  absence  of  fees  paid  in the prior year to the
Company's  previous  bank group.  The Company reduced its outstanding debt early
in  November 1997 by $35.7 million by applying the net proceeds from the sale of
the  ventilation  products division.  The third quarter estimated tax payment of
$4.2  million,  which  included  taxes  due on the gain, was paid in March 1998,
which  increased  federal  and  state  debt.    As  a result of this asset sale,
combined  with  a  net reduction in debt due to cash provided from operations in
the  third  quarter of fiscal 1998, the Company reduced its aggregate debt level
to  $20.3  million  at March 31, 1998 compared to debt of $52.2 million at March
31,  1997.  In addition, the Company incurred approximately $0.6 million in fees
and  loan  cost  amortization in the third quarter of fiscal 1997, which did not
repeat  in  the  third  quarter  of  fiscal  1998.

     Allied  had income before provision for income taxes of $0.5 million in the
third  quarter  of  fiscal  1998  compared to a loss before provision for income
taxes  of  $0.2  million  in  the  prior year as result of the factors discussed
above.

     Allied  recorded  a provision for income taxes of $0.3 million in the third
quarter  of  fiscal  1998,  resulting  in  a  relatively high effective tax rate
of  55%,  which  primarily  reflects  the  non-deductibility  of $0.2 million of
goodwill  amortization  in the third quarter of  fiscal 1998.  In the comparable
prior  year period the Company recorded a tax provision  of  $0.1  million  on a
$0.2 million loss before provision for income taxes.

     The  net income for the third quarter is $0.2 million, or $0.03 per diluted
share.    The  net  income  for  the  third  quarter  of  fiscal 1998 ends seven
consecutive  quarters of net losses from operations.  The net loss for the third
quarter  of  fiscal 1997 was $0.3 million, or $0.04 per basic share.  The number
of common shares utilized in the calculation of earnings per share was 7,806,682
and  7,804,471  for  the  third  quarter  of  fiscal  1998  and  fiscal  1997,
respectively.

Nine  months  ended  March 31, 1998 compared to nine months ended March 31, 1997
--------------------------------------------------------------------------------

Net  sales  for  the  nine  months  ended  March  31, 1998 were $77.0 million, a
decrease  of $11.0 million from sales of $88.0 million in the same period in the
prior year.  Of the $11.0 million decline in net sales, $10.5 million relates to
sales associated with the disposal of the ventilation products division and $0.5
million  relates  to  a  decline  in  sales  of core business products.  Certain
external  and  internal factors, as previously discussed, impacted sales for the
nine  months ended March 31, 1998, particularly in the last two fiscal quarters,
each  of  which  experienced  a decline in sales of core business products.  The
pace  of  incoming  business,  as  measured in new orders, continues to be soft.
Orders  for  the  nine  months  ended March 31, 1998 of $77.2 million were $17.1
million  less  than  orders of $94.3 million for the nine months ended March 31,
1997.    Of  the  $17.1  million  decline in orders, $11.4 million relate to the
disposed  ventilation  products  division  while  $5.7  million  relates  to the
Company's  core  business products.  The decline in core business orders of $5.7
million  represents  an  8.1% decrease for the nine months ended March 31, 1998,
and  consists  of  declines  in the second and third quarters of fiscal 1998, as
compared  to  the prior year periods, which were partially offset by an increase
in  orders  during the first quarter of fiscal 1998.  Management can not predict
when the ramifications of the previously discussed macroeconomic conditions will
be resolved, particularly the decline in the Asian market and pressures from the
home  healthcare  market.  Internal operational issues, as previously discussed,
are  being addressed and have been improving, however, there can be no assurance
as  to  the  extent  that  these  issues  will  be  resolved.

                                       17
<PAGE>
Medical  gas  equipment  sales for the nine months ended March 31, 1998 of $35.0
million  were $3.4 million, or 10.7% above same period prior year sales of $31.6
million.    Medical  gas  system construction sales, headwall sales, medical gas
suction  and  regulation  device sales experienced increases of 11.0%, 48.0% and
3.9%,  respectively,  for  the  nine months ended March 31, 1998 compared to the
same  period  prior year sales.  The increase in sales of these products for the
nine  months ended March 31, 1998  primarily related to shipments of orders from
backlog  which  had  accumulated  prior  to  June  30,  1997.

Orders  for  medical  gas  equipment  of $30.9 million for the nine months ended
March 31, 1998 were $4.7 million, or 13.2% less than orders of $35.6 million for
the  nine  months  ended  March  31,  1997.  Medical gas construction orders and
headwall  orders,  which are subject to frequent fluctuations in order patterns,
declined  9.5%  and  56.6%, respectively, and orders for medical gas suction and
regulation  devices, which experienced soft first and second quarter fiscal 1998
demand,  have  declined  4.2%  as  compared  to  the  prior  year  period.   Two
significant  orders  for  medical  gas construction and headwall products, which
were  booked  in the prior year, did not repeat in the current fiscal year.  Bid
and quote activity for these products remain approximately the same in number of
quotes, but the dollar value of these quotes have, on average, declined.  Orders
for  medical  gas  suction  and  regulation  devices had declined earlier in the
fiscal  year  due  to  soft Asian demand and the domestic distributors desire to
reduce  their  stocking  status  of  these  products,  however, orders for these
products  strengthened  in  the  third  quarter  of  fiscal  1998  as previously
discussed.

Respiratory  therapy equipment sales for the nine months ended March 31, 1998 of
$33.5 million were $14.1 million below the same period prior year sales of $47.6
million.   Of the decline, $10.5 million was attributable to the disposal of the
ventilator  products  division  and  $3.6  million of the decline relates to the
Company's remaining product lines.  Sales to the home healthcare market declined
by  18.6%    due to external factors as previously discussed.  Pricing pressures
caused  by  the  consolidation of home healthcare dealers and continued concerns
over  potential  Medicare  and  Medicaid  reductions  in  home  oxygen  therapy
reimbursement  rates continued to impact sales of home healthcare products.  The
Company  has  continued  to  experience capacity limitations at the Toledo, Ohio
facility  although  recent  improvements  in  direct labor constraints and plant
layout  changes  have begun to improve manufacturing efficiencies and throughput
of  disposable  products.  Sales to the hospital market increased by 4.8% in the
nine  months ended March 31, 1998 compared to the prior year same period but had
declined  by  2.9% in the third quarter of fiscal 1998.  The new tooling for the
disposable  canister units has now been placed in service, and, in addition, the
new  Respical  calibration  device  has  been introduced in the third quarter of
fiscal  1998,  these  products have been well received by the market.  Orders of
respiratory  therapy  products for the nine months ended March 31, 1998, for the
core business products, declined by 5.6% as a result of factors discussed above.

Emergency  medical product sales of $8.5 million for the nine months ended March
31,  1998    were  $0.2  million,  or  2.2%  under  sales of $8.7 million in the
comparable  prior  year period.  Orders for emergency medical products increased
to  $9.8  million for the nine months ended March 31, 1998 from $9.4 million for
the  nine  months  ended March 31, 1997.  The increase is attributable to a $0.6
million  stocking  order made in the third quarter of fiscal 1998, as previously
discussed.

                                       18
<PAGE>
The  impact  of  the  Asian  currency devaluations combined with the sale of the
ventilation products division affected the Company's international sales for the
nine  months  ended  March 31, 1998.  International sales, which are included in
the  product  line sales discussed above, were $19.4 million for the nine months
ended  March  31,  1998,  a  decline of $5.3 million from international sales of
$24.7  million for the nine months ended March 31, 1997.  A $5.8 million decline
in  sales  resulting  from  the  previously  discussed  sale  of the ventilation
products  division  was  partially  offset  by  a  year to year increase in core
business sales of $0.5 million.  Core business international sales  increased by
3.5%  from  year  to  year,  however,  the shipments primarily related to orders
received  in prior quarters.  International orders of core business products for
the  nine  months  ended  March 31, 1998 were 23.5%  below the prior year period
principally  relating  to  softness  in  Asian  markets.

Gross  profit for the nine months ended March 31, 1998 of $22.5 million was $5.2
below  the  gross  profit  of  $28.6 million for the nine months ended March 31,
1997.    Gross profit as a percent to net sales was 28.1% and 31.5% for the nine
months  ended  March 31, 1998 and March 31, 1997, respectively.  The sale of the
high  margin  ventilation products division impacted the decline in gross margin
as  these  products  were part of the Company's business for only four months of
fiscal  1998 compared to the full nine months in fiscal 1997.  Continued pricing
pressures  brought  on by the consolidations and cost containment initiatives of
healthcare  providers  and the Company's planned reductions in inventories which
resulted  in  reduced  manufacturing  throughput  and  lower absorption of plant
overhead  further  served to reduce margins as a percent to net sales.  Finally,
the  Company  increased inventory reserves in excess of $1.0 million in the nine
months  ended  March 31, 1998, the effects which are reflected in the results of
operations.

Selling, General, and Administrative ("SG&A") expenses for the nine months ended
March  31, 1998 were $19.0 million, a decline of $5.7 million from SG&A expenses
of  $24.7 million for the nine months ended March 31, 1997.  The decline in SG&A
expenses primarily relates to the sale of the ventilation products division.  In
addition,  certain investments in field sales force training, product literature
expenditures,  and  other  consulting  expenses  made  in the prior year did not
repeat  in fiscal 1998.  Partially offsetting these reductions in SG&A expenses,
the Company, in the current year, installed its upgraded computer systems at its
Toledo,  Ohio operations and also incurred recruitment costs to fill several key
operations  positions.    As  a  percent to net sales, SG&A expenses declined to
24.7%  for  the  nine months ended March 31, 1998 compared to 28.1% for the nine
months  ended  March  31,  1997.

As  previously  discussed,  the Company recorded a non-recurring gain on sale of
the  ventilation  products  division  of  $12.8  million  and  recorded  several
non-recurring  charges  totaling  $9.8  million  in the second quarter of fiscal
1998.

Income from operations for the nine months ended March 31, 1998 of  $6.5 million
was  $3.6  million  above  income  from  operations of $2.9 million for the nine
months ended March 31, 1997.  The increase was primarily attributable to the net
effects  of the non-recurring items and other matters described above.   Without
the  non-recurring items discussed above, income from operations would have been
$3.5  million  for the nine months ended March 31, 1998 compared to $2.9 million
for  the  prior  year  same  period.

                                       19
<PAGE>
Interest  expense  for  the nine months ended March 31, 1998 was $3.6 million, a
decrease of $0.7 million from interest expense of $4.3 million in the prior year
period.    This  decrease  primarily  relates to lower debt levels, as described
below.    On  August  8,  1997,  the  Company refinanced its commercial debt and
entered  into  a $46.0 million credit facility with Foothill Capital Corporation
and  the  Company  also  obtained  $5.0  million  of  subordinated  debt.    The
refinancing  arrangement  eliminated  the  requirement  of  making  significant
quarterly  fee  payments  to obtain covenant waivers from the Company's previous
bank group.  The Company reduced its outstanding debt in early November by $35.7
million  dollars  by  applying  the  net proceeds of the sale of the ventilation
products division.  The third quarter estimated federal and state tax payment of
approximately  $4.2  million,  which included taxes due on the gain, was paid in
March,  1998.  Interest expense during the nine months ended March 31, 1998 also
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 gain, and fees
paid  to the previous bank group in the first quarter of fiscal 1998.   Interest
expense  for  the  nine  months  ended  March 31, 1997 included fees paid to the
previous  bank  group  in  the  third  quarter  of  fiscal  1997.

Allied  had income before provision for income taxes of $2.8 million in the nine
months ended March 31, 1998 compared to a loss before provision for income taxes
of  $1.4  million  in  the  prior  year  comparable  period, an increase of $4.2
million,  resulting  from  the  factors  described  above.

The  provision  for income taxes of $9.4 million for the nine months ended March
31,  1998  as  compared  to  income  before taxes and extraordinary loss of $2.8
million,  resulted  in  an  unusual  effective  tax  rate of 333% due to the tax
effects  relative  to  the  non-recurring items recorded in fiscal 1998.  In the
nine months ended March 31, 1997, Allied recorded a tax benefit of $0.4 million,
for  an  effective  tax  rate  of  28%  on  a loss before taxes of $1.4 million.

Allied recorded an extraordinary loss on the early extinguishment of debt, which
is  discussed further below, of $0.5 million, or $0.07 diluted per share, in the
first  quarter  of fiscal 1998.  This extraordinary loss is net of a tax benefit
of $0.4 million.  The net loss for the nine months ended March 31, 1998 was $7.1
million,  or  $0.91 per diluted share.  Exclusive of the extraordinary loss, the
non-recurring  gain  on  the sale of the ventilation products division business,
and the non-recurring charges, the net loss for  the nine months ended March 31,
1998  would have been $0.5 million or $0.06 per diluted share.  The net loss for
the  nine  months  ended  March  31, 1997 was $1.0 million, or $0.13 per diluted
share.    Earnings  per  share  amounts reported are diluted earnings per share,
which  are  substantially  the  same as basic earnings per share.  The number of
common  shares  used  in the calculation of earnings per share was 7,804,471 and
7,796,682  for  the  first  nine  months  of  fiscal  1998  and  fiscal  1997,
respectively.

FINANCIAL  CONDITION
--------------------

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

<TABLE>
<CAPTION>
Dollars in thousands   March 31, 1998   June 30, 1997
--------------------  ---------------  ---------------
<S>                   <C>              <C>
  Cash. . . . . . .  $          1,209  $           988
  Working Capital .  $         23,767  $        18,743
  Total Debt. . . .  $         20,262  $        46,932
  Current Ratio . .            2.67:1           1.57:1
</TABLE>

                                       20
<PAGE>
The  Company's working capital was $23.8 million at March 31, 1998, compared to
$18.7  million at June 30, 1997. Inventories, other current assets, and accounts
payable  all  decreased  as  a  result  of  the previously discussed sale of the
ventilation  products  division.    Proceeds  from  such  sale  were utilized to
significantly  reduce  debt  during the second quarter of fiscal 1998.  Accounts
receivable  declined  to  $16.5  million at March 31, 1998, or $6.6 million from
$23.1  million  at June 30, 1997.  Of this decline, $7.3 million are receivables
attributable  to  the  ventilator  business  which  was  partially  offset by an
increase  in  receivables  of  $0.7  million  for  the  Company's core business.
Accounts  receivable  as measured in days sales outstanding ("DSO") decreased to
69  DSO  from 71 DSO in this period while the amount of receivables over 90 days
from  date  of  invoice declined by $0.9 million.  Inventories declined to $20.2
million, at March 31, 1998 or $5.8 million, from $26.0 million at June 30, 1997.
Of  this  decline,  $4.7  million  is  attributable  to the ventilation products
division sale while a decline of $1.1 million in inventories related to the core
business.    The Company has focused on improving the mix of inventories and has
been  increasing  stocking  levels  of high volume products while simultaneously
reducing  the  stocking levels of low volume products.  Inventories, as measured
in  days on hand ("DOH"), increased to 140 DOH at March 31, 1998 from 124 DOH at
June  30,  1997.   Accounts payable decreased to $6.5 million at March 31, 1998,
down  $7.5  million  from  the  June 30, 1997 balance of $14.0 million.  Of this
decline,  $1.2 million of payables related to the ventilation products division.
The  Company experienced limited liquidity during fiscal 1997 due to a reduction
in  borrowing  availability  caused by principal payments made on its term loans
combined  with  the high level of fees paid to the Company's previous commercial
bank  group.  Consequently,  payments  to  vendors  and  other  obligations were
extended.    The  Company' s limited liquidity situation was alleviated with the
completion of its debt refinancing on August 8, 1997, which is discussed further
below.    The Company is current on all its obligations.  The current portion of
long  term  debt at March 31, 1998 was $2.6 million compared to $12.9 million at
June  30,  1997.    The June 30, 1997 current portion of long term debt included
$4.0  million of term notes and $5.0 million of subordinated debt which were due
to  mature on February 1, 1998, but were repaid on November 3, 1997 and November
4,  1997,  respectively, with proceeds from the sale of the ventilation products
division.

The net increase/(decrease) in cash for the nine months ended March 31, 1998 and
1997  was  $0.2  million and $(0.5) million, respectively.  Net cash provided by
(used  by)  operations was $(7.3) million and $3.2 million for the same periods.
Cash  used by operations for the nine months ended March 31, 1998 consisted of a
net  loss of $7.1 million which was partially offset by $3.9 million in non-cash
charges  to  operations  for  amortization  and depreciation, a non-cash loss on
refinancing  charges of $0.9 million and changes in working capital and deferred
tax accounts of $1.7 million.  In addition, the Company reported a $12.8 million
gain  on  sale the ventilation products division and also recorded non-recurring
charges,  for  which  the  non-cash  portion is $9.6 million, in the nine months
ended March 31, 1998.  The Company received pre-tax proceeds of $35.4 million on
the sale of the ventilation products division, reduced total debt by a net $27.5
million,  and made capital expenditures of $0.4 million in the nine months ended
March  31,  1998.    Cash  provided  by operations for the comparable prior year
period  consisted of a net loss of $1.0 million which was offset by the non-cash
charges  of  $4.1  million  for  depreciation  and amortization, as well as cash
generated by changes in working capital accounts, which included a tax refund of
$1.8  million,  of  $0.1  million.  The cash provided by operations for the nine
months  ended  March 31, 1997 was used for capital expenditures of $1.7 million,
net  debt  reduction of $1.4 million and dividends of $0.5 million.  The adverse
results  of  operations  during the latter half of fiscal 1996 and during fiscal
1997 impacted the Company's liquidity and the ability of the Company to continue
historical levels of fixed payments.  Accordingly, August 21, 1996 the Company's
Board  of  Directors  had  voted  to  suspend  quarterly  dividends  effective
immediately  subsequent  to  the  payment of dividends for the fourth quarter of
fiscal 1996.  In addition, to improve the liquidity of the Company and to reduce
interest  expense,  on August 8, 1997, the Company refinanced its existing debt,
which  is  discussed  further  below.

                                       21
<PAGE>
At  March  31,  1998,  the  Company had aggregate indebtedness of $20.3 million,
including  $2.6  million of short-term debt and $17.7 million of long-term debt.
At  June  30,  1997,  the  Company  had aggregate indebtedness of $46.9 million,
including  $12.9 million of short-term debt and $34.0 million of long-term debt.
Throughout  fiscal  1996,  the  Company  entered into a series of amendments and
waiver  negotiations  with its previous bank syndicate.  During fiscal 1997, the
Company  paid  waiver fees totaling approximately $2.2 million for the September
1996  amendment  to  its  credit  facilities,  to  obtain  waivers for technical
covenant  violations at December 31, 1996 and March 31, 1997 and paid additional
fees  of  $0.4  million  in  the  first quarter of fiscal 1998.  The Company was
unsuccessful  in  its  attempts  to  negotiate  a  long-term  agreement with its
previous  bank syndicate.  Accordingly, on August 8, 1997 the Company refinanced
its  existing  debt  through  a  new $46.0 million credit facility with Foothill
Capital  Corporation.   The new credit facility, with a blended average interest
rate  of  10.2%,  was  comprised of a $25.0 million three-year revolving line of
credit,  three-year  term loans of $10.0 million and $7.0 million, respectively,
and a $4.0 million term loan maturing in February 1998.  In conjunction with its
new  credit facilities, Allied placed an additional $5.0 million in subordinated
debt, with several related parties to the Company maturing in February 1998.  In
addition, the Company issued 112,500 warrants at an exercise price of $7.025 per
share,  62,500  of  which  were issued to the subordinated debt holders with the
balance  issued to Foothill Capital Corporation.  Such warrants are exerciseable
at  the  option of the holder beginning February 8, 1998.  The proceeds from the
August  8,  1997 refinancing were used to replace the Company's outstanding debt
with  the  previous  commercial  bank  syndicate,  and  to  provide  additional
liquidity.    On  October  31,  1997  the  Company  completed  the  sale  of its
ventilation  products division.  On November 3, 1997 the Company repaid two term
notes  and  a  significant portion of its revolving credit facility to Foothill.
On  November  4,  1997  the  Company  repaid its $5.0 million subordinated debt.
Amendments  to  the  Foothill  credit facility were completed in the fiscal 1998
third  quarter  to  reflect  the  impact  of  the  significant reductions in the
Company's  outstanding  debt  and the sale of the ventilation products division.
The  Company  believes  that  cash flow from operations and available borrowings
under  its  credit  facilities  will be sufficient to finance fixed payments and
planned  capital  expenditures  in  fiscal  1998.

As  of  March 31, 1998, the Company had a backlog of $18.7 million compared to a
backlog of $24.9 million at June 30, 1997.  The Company's backlog, a significant
portion  of  which  is  attributable  to  the  Company's  medical  gas equipment
products,  consists  of  firm  customer  purchase orders which may be subject to
cancellation  by  the  customer.   The sale of the ventilation products division
reduced the Company's backlog by $3.7 million as compared to June 30, 1997.  The
Company's  backlog  increased  in  emergency  medical  products  and respiratory
therapy  products  in  the  nine months ended March 31, 1998, such increase  was
more  than  offset  by  a decline in backlog for medical gas equipment products.

Inflation  has not had a material effect on the Company's business or results of
operations.    The  Company makes its foreign sales in dollars and, accordingly,
sales  proceeds  are  not  affected  by exchange rate fluctuations, although the
effect  on  its  customers  does  impact  the  pace  of  incoming  orders.

                                       22
<PAGE>
PART  II. OTHER  INFORMATION

Item  5.  Other  Information

          None

Item  6.  Exhibits  and  Reports  on  Form  8-K

(a)       Exhibits:

          Exhibit 10.1 - Amendment  Number  One  to  Loan and Security Agreement
          with Foothill Capital Corporation

          Exhibit  27  -  Financial  Data  Schedule

(b)       Reports  on  Form  8-K

     None


                                       23
<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.



Date: April 30, 1998    /s/ Barry F. Baker
                        -------------------
                            Barry  F. Baker
                            Vice President - Finance and Chief Financial Officer
                                 (Principal Accounting and Financial Officer)


                                       24
<PAGE>