**Contact:    Daniel      C. Dunn**

**Chief      Financial Officer**

**(314)      771-2400**

**Allied        Healthcare Net Income Increases**

*.*

* *

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|                                                        |   | Three months ended September 30, |       |
|-------------------------------------------------------------|--------|------------------------------------------------------|------------|
|                                                        |   | 2008                                                 |       | 2007 |   |
|                                                        |   |                                                 |       |   |   |
| Net                sales                                    |   | $                                                    | 14,441,011 |   | $ | 14,101,618 |   |
| Cost                of sales                                |   |                                                 | 10,939,957 |   |   | 10,934,605 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Gross                profit                                 |   |                                                 | 3,501,054  |   |   | 3,167,013 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Selling,                general and administrative expenses |   |                                                 | 3,183,587  |   |   | 3,042,969 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Income                from operations                       |   |                                                 | 317,467    |   |   | 124,044 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Interest                income                              |   |                                                 | (30,659    | ) |   | (40,769 | ) |
| Other                expense, net                           |   |                                                 | 12,067     |   |   | 15,150 |   |
|                                                        |   |                                                 | (18,592    | ) |   | (25,619 | ) |
|                                                        |   |                                                 |       |   |   |   |   |
| Income                    before provision for income taxes |   |                                                 | 336,059    |   |   | 149,663 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Provision                for income taxes                   |   |                                                 | 127,702    |   |   | 62,597 |   |
| Net                income                                   |   | $                                                    | 208,357    |   | $ | 87,066 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Basic                and diluted earnings per share         |   | $                                                    | 0.03       |   | $ | 0.01 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Weighted                average common shares               |   |                                                 |       |   |   |   |   |
| Outstanding                - Basic                          |   |                                                 | 7,891,232  |   |   | 7,883,577 |   |
|                                                        |   |                                                 |       |   |   |   |   |
| Weighted                average common shares               |   |                                                 |       |   |   |   |   |
| Outstanding                - Diluted                        |   |                                                 | 8,132,931  |   |   | 8,106,796 |   |

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|                                                                                                                                                                                                                                                                                                                                                   |   | September 30, 2008 |        | June 30, 2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|-------------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                                                                                                 |   |                         |        |                    |   |
| Current                assets:                                                                                                                                                                                                                                                                                                                         |   |                         |        |                    |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                                                                               |   | $                            | 4,124,456   |                    | $      | 6,149,015 |   |
| Accounts                receivable, net of allowances of $300,000                                                                                                                                                                                                                                                                                      |   |                         | 6,372,369   |                    |   | 6,441,683 |   |
| Inventories,                net                                                                                                                                                                                                                                                                                                                        |   |                         | 12,776,424  |                    |   | 12,046,450 |   |
| Other                current assets                                                                                                                                                                                                                                                                                                                    |   |                         | 554,744     |                    |   | 394,975 |   |
| Total                current assets                                                                                                                                                                                                                                                                                                                    |   |                         | 23,827,993  |                    |   | 25,032,123 |   |
| Property,                plant and equipment, net                                                                                                                                                                                                                                                                                                      |   |                         | 11,174,253  |                    |   | 10,542,573 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                               |   |                         | 15,979,830  |                    |   | 15,979,830 |   |
| Other                assets, net                                                                                                                                                                                                                                                                                                                       |   |                         | 700,267     |                    |   | 703,328 |   |
| Total                assets                                                                                                                                                                                                                                                                                                                            |   | $                            | 51,682,343  |                    | $      | 52,257,854 |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |                         |        |                    |   |   |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                    |   |                         |        |                    |   |   |   |
| Current                liabilities:                                                                                                                                                                                                                                                                                                                    |   |                         |        |                    |   |   |   |
| Accounts                payable                                                                                                                                                                                                                                                                                                                        |   | $                            | 2,726,387   |                    | $      | 2,590,804 |   |
| Other                accrued liabilities                                                                                                                                                                                                                                                                                                               |   |                         | 2,124,890   |                    |   | 2,960,334 |   |
| Deferred                income taxes                                                                                                                                                                                                                                                                                                                   |   |                         | 523,226     |                    |   | 500,238 |   |
| Deferred                revenue                                                                                                                                                                                                                                                                                                                        |   |                         | 690,000     |                    |   | 690,000 |   |
| Total                current liabilities                                                                                                                                                                                                                                                                                                               |   |                         | 6,064,503   |                    |   | 6,741,376 |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |                         |        |                    |   |   |   |
| Deferred                revenue                                                                                                                                                                                                                                                                                                                        |   |                         | 2,005,000   |                    |   | 2,177,500 |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |                         |        |                    |   |   |   |
| Commitments                and contingencies                                                                                                                                                                                                                                                                                                           |   |                         |        |                    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                   |   |                         |        |                    |   |   |   |
| Stockholders'                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; 10,204,819                and                10,188,569 shares issued at September 30, 2008 and June 30, 2008,                respectively; 7,901,327 and 7,885,077 shares outstanding at September                30,                2008 and June 30, 2008, respectively |   |                         | 102,048     |                    |   | 101,886 |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                                              |   |                         | 47,589,427  |                    |   | 47,524,084 |   |
| Retained                earnings                                                                                                                                                                                                                                                                                                                       |   |                         | 16,652,793  |                    |   | 16,444,436 |   |
| Less:                treasury stock, at cost; 2,303,492 shares at                                                                                                                                                                                                                                                                                      |   |                         |        |                    |   |   |   |
| September                30, 2008 and June 30, 2008, respectively                                                                                                                                                                                                                                                                                      |   |                         | (20,731,428 | )                       |   | (20,731,428 | ) |
| Total                stockholders' equity                                                                                                                                                                                                                                                                                                              |   |                         | 43,612,840  |                    |   | 43,338,978 |   |
| Total                liabilities and stockholders' equity                                                                                                                                                                                                                                                                                              |   | $                            | 51,682,343  |                    | $      | 52,257,854 |   |

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