Health & Fitness
Health and Fitness
Health and Fitness
Wed, August 5, 2009
Tue, August 4, 2009 Allied Healthcare: Allied Healthcare International Inc. Reports Fiscal 2009 Third Quarter Results
NEW YORK, NY--(Marketwire - August 4, 2009) - Allied Healthcare International Inc. ( Allied Healthcare International Inc. ( To provide investors with an increased understanding of the Company's business, as in previous quarters, Allied is providing a breakdown of its revenues, gross profits, selling, general and administrative costs and operating income at constant exchange rates using the comparable prior period weighted average exchange rate. In addition, as the Company's revenues and gross profits are generated in the United Kingdom, an analysis is included, within the management discussion below, of the last seven quarters' revenues and gross profits in pounds sterling to enable investors to fully understand the underlying trends over these periods without the effects of currency exchange rates. As noted in the reported numbers, recent fluctuations in foreign exchange rates have significantly impacted the Company's current period results. Fiscal Third Quarter Results: For the third quarter of fiscal 2009, at constant exchange rates, revenues increased by $5.5 million, or 7.3%, to $80.5 million, compared with $75.0 million reported during the same period in fiscal 2008. Contributing to the increase in revenues was Allied's Homecare revenues, which grew by 17.3% to $67.5 million. Nursing Home revenues declined by 25.3% to $7.3 million. Hospital revenues decreased by 26.0% to $5.7 million. After the unfavorable impact of currency exchange of $17.4 million, revenues decreased to $63.1 million. At constant exchange rates, total gross profit for the third fiscal quarter increased 5.8% to $24.5 million, compared with $23.1 million reported for the comparable quarter in fiscal 2008. Gross profit margin for the third quarter was 30.4%, as compared to 30.8% for the comparable prior period. Foreign exchange decreased gross profit by $5.3 million to $19.2 million for the quarter. At constant exchange rates, SG&A for the third fiscal quarter was $20.5 million, compared with $19.4 million reported last year. As a percent of revenues, SG&A costs were 25.8%, compared to 25.9% in the comparable prior year period. Foreign exchange decreased costs by $4.2 million to $16.3 million for the quarter. At constant exchange rates, operating income for the third quarter of fiscal 2009 increased to $4.0 million, compared to operating income of $3.7 million reported during the 2008 third fiscal quarter. Foreign exchange decreased operating income by $1.1 million to $2.9 million for the quarter. Net income for the third quarter of fiscal 2009 was $2.4 million, as compared with $2.5 million reported during the 2008 third fiscal quarter. Diluted earnings per share was $0.05 for the quarter, compared to diluted earnings per share of $0.05 last year. Fiscal Nine-Month Results: For the fiscal nine months ended June 30, 2009, at constant exchange rates, revenues increased by $12.8 million, or 5.7%, to $236.4 million, compared with $223.6 million reported during the same period in fiscal 2008. Contributing to the increase in revenues was Allied's Homecare revenues, which grew by 13.8% to $191.2 million. Nursing Home revenues declined by 21.1% to $25.3 million. Hospital revenues decreased by 15.2% to $19.9 million. After the unfavorable impact of currency exchange of $56.4 million, revenues decreased to $180.0 million. At constant exchange rates, total gross profit for the fiscal nine months ended June 30, 2009, increased 7.4% to $72.5 million, compared with $67.5 million reported for the comparable period in fiscal 2008. Gross profit margin for the fiscal nine months ended June 30, 2009, increased to 30.6% from 30.2% for the comparable prior period. Foreign exchange decreased gross profit by $17.3 million to $55.2 million for the quarter. At constant exchange rates, SG&A for the fiscal nine months ended June 30, 2009, was $60.0 million, compared with $59.1 million reported last year, an increase of 1.5%. As a percent of revenues, SG&A costs were 25.7% compared to 26.4% in the comparable prior year period. Foreign exchange decreased costs by $13.8 million to $46.2 million for the quarter. At constant exchange rates, operating income for the fiscal nine months ended June 30, 2009, increased to $12.5 million, compared to operating income of $8.4 million reported during the 2008 nine months ended June 30, an increase of 48.6% over the prior year. Foreign exchange decreased operating income by $3.5 million to $8.9 million for the nine-month period. Income from continuing operations for the nine months ended June 30, 2009, increased to $7.0 million, as compared with $5.9 million reported during the 2008 fiscal nine-month period. Diluted earnings per share from continuing operations was $0.15 for the nine month period ended June 30, 2009, compared to diluted earnings per share from continuing operations of $0.13 last year. Net income for the nine months ended June 30, 2009, increased to $7.4 million, as compared with $5.9 million reported during the 2008 fiscal nine-month period. Diluted earnings per share was $0.16 for the nine-month period, which includes $0.01 from discontinued operations due to the release of reserves as a result of the warranty period within the sales agreement, related to the sale of the respiratory business in fiscal 2007, having expired. This compares to $0.13 for the same prior year period. At June 30, 2009, and September 30, 2008, Allied's cash balance was $33.7 million (£20.4 million) and $26.2 million (£14.4 million), respectively, representing an underlying increase in the cash balance of £6.0 million. For the fiscal nine months ended June 30, 2009, depreciation and amortization was $2.8 million (£1.8 million) and capital expenditures were $2.2 million (£1.4 million). Days Sales Outstanding was twenty-four days at June 30, 2009 (46 days including unbilled account receivables), and twenty-five days at June 30, 2008 (44 days including unbilled account receivables). Management Discussion: "We continue to see good growth in our homecare business, which now represents almost 84% of our business," commented Sandy Young, Chief Executive Officer of Allied. "The revenue growth in the quarter of 17.3% was particularly pleasing and was ahead of the 10-15% growth range that we have recently been operating within. Our Continuing Care continues to grow strongly and accounts for over 15% of the revenues of this business. Continuing Care has benefitted from the restructuring we carried out earlier this year. We have low penetration in this market and our proposition of providing homecare with a lower level medical requirement via support staff under nurse supervision is popular with hospital trusts." Mr. Young continued: "Our nursing homes and hospital staffing business results continue to struggle but following our acceptance onto the new PASA framework agreements, which come into effect in October 2009, we are hopeful that the higher charges under this revised contract will give us opportunities going forward. The higher charges are necessary to enable us to effectively recruit staff to service this business. We currently have plans in the next financial year to re-launch this service line in a few of our regional offices as well as our existing London operation. "While current period SG&A running costs of 25.8% of revenues are lower than the prior year period, we are continuing to invest in certain areas of our business that includes such items as continuing care, learning disability, IT systems, and business improvement projects to ensure that we support future growth in revenues. At the same time, we maintain tight controls over other areas of SG&A costs so as to maintain our objective of reducing SG&A costs as a percent of revenues. "We currently have several business improvement initiatives under way with project management support. These projects cover winning new business, carer retention, bid implementation, and branch operations. There are also other projects supporting service delivery. We believe that being a high quality service provider is a key driver to increased revenue and profit growth. "The third quarter also concluded the successful pilot phase of our Coldharbour IT replacement. We now have thirteen branches successfully running on Coldharbour. The cost of the project is within the original budget and time projections with a total capital expenditure of $2.4 million and operating expense of $4.5 million. To date, expenditures have been $2.7 million split between $2.2 million capital and $0.5 million operating expense. The project will allow us to make further efficiencies in the way we process transactions and will also improve service delivery." Mr. Young concluded: "As noted in our previous quarter's press release, with nearly all our operations in the United Kingdom, we believe it is important for investors to see the underlying revenues and gross profits in pound currency as detailed below. This shows growth in our gross margins year to date of 7.4% and our third quarter gross margin of 30.4% is well within our expectations. Our SG&A costs year to date, excluding exchange effects, increased by 1.5%, compared to the prior year despite the increase in revenues that we have generated." Dr. Jeffrey Peris, Non-Executive Chairman of the Board of Allied, commented: "Sandy Young and the management team have achieved operating income for the first three quarters of $12.5 million, excluding exchange, which compares to $8.4 million for the same prior year's quarters. This is an increase of 48.6%, and reflects the continued improvements the Company is making across its business to help it affirm its position as one of the leaders in the U.K. homecare market place. We are pleased with the results of the third quarter and that the successes of previous quarters have enabled Allied to be included in the Russell 3,000 Index, thereby providing us with opportunities to reach additional investors." Conference Call Information -- August 4, 2009 at 10:00AM EST / 3:00PM GMT: Allied invites all those interested in listening to management's discussion of the results to join the call by dialing 877-407-0778 for domestic participants, and 201-689-8565 for international participants today, August 4, 2009, at 10:00AM EST / 3:00PM GMT. Participants may also access a live webcast of the conference call through the "Investors" section of Allied Healthcare's Website: [ www.alliedhealthcare.com ]. A replay will be available for one week following the call by dialing 877-660-6853 for domestic participants, and 201-612-7415 for international participants. When prompted, please enter account number 286 and conference ID number 321299. The presentation will be available and archived on the Company's website for ninety days. In addition to disclosing results of operations that are determined in accordance with generally accepted accounting principles ("GAAP"), this press release also discloses non-GAAP results of operations that exclude or include certain charges. These non-GAAP measures adjust for foreign exchange effects. Management believes that the presentation of these non-GAAP measures provides useful information to investors regarding the Company's results of operations, as these non-GAAP measures allow investors to better evaluate ongoing business performance. Investors should consider non-GAAP measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. A reconciliation of the non-GAAP measures disclosed in this press release with the most comparable GAAP measures are included in the financial tables included in this press release. For more news and information on Allied Healthcare International Inc., please visit [ http://www.IRGnews.com/coi/AHCI ] where you can find the CEO's video, a fact sheet on the company, investor presentations, and more. ABOUT ALLIED HEALTHCARE INTERNATIONAL INC. Allied Healthcare International Inc. ([ http://www.alliedhealthcare.com ]) is a leading provider of flexible healthcare staffing services in the United Kingdom. Allied operates a community-based network of approximately one hundred ten branches with the capacity to provide carers (known as home health aides in the U.S.), nurses, and specialized medical personnel to locations covering approximately 90% of the U.K. population. Allied meets the needs of private patients, community care, nursing and care homes, and hospitals. FORWARD-LOOKING STATEMENTS Certain statements contained in this news release may be forward-looking statements. These forward-looking statements are based on current expectations and projections about future events. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements include: general economic and market conditions; Allied's ability to continue to recruit and retain flexible healthcare staff; Allied's ability to enter into contracts with local government social services departments, NHS Trusts, hospitals and other healthcare facility clients on terms attractive to Allied; the general level of patient occupancy at our clients' hospitals and healthcare facilities; dependence on the proper functioning of Allied's information systems; the effect of existing or future government regulation of the healthcare industry, and Allied's ability to comply with these regulations; the impact of medical malpractice and other claims asserted against Allied; the effect of regulatory change that may apply to Allied and that may increase costs and reduce revenues and profitability; Allied's ability to use net operating loss carry forwards to offset net income; the effect that fluctuations in foreign currency exchange rates may have on our dollar-denominated results of operations; and the impairment of goodwill, of which Allied has a substantial amount on the balance sheet, may have the effect of decreasing earnings or increasing losses. Other factors that could cause actual results to differ from those implied by the forward-looking statements in this press release include those described in Allied's most recently filed SEC documents, such as its most recent annual report on Form 10-K, all quarterly reports on Form 10-Q and any current reports on Form 8-K filed since the date of the last Form 10-K. Allied undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Fiscal 2009 Fiscal 2008 Third Third (In millions, except EPS) Quarter Quarter Revenues, as reported $ 63.1 $ 75.0 Revenues, at constant exchange rates $ 80.5 $ 75.0 Gross Profit, as reported $ 19.2 $ 23.1 Gross Profit, at constant exchange rates $ 24.5 $ 23.1 Gross Margin % 30.4% 30.8% Operating Income, as reported $ 2.9 $ 3.7 Operating Income, at constant exchange rates $ 4.0 $ 3.7 Diluted EPS, continuing operations $ 0.05 $ 0.05 ========== ==========
Quarter Ended June 30, 2009 ------------------------------------------------ Gross Gross Revenue % Margin % Margin % -------- -------- -------- -------- -------- (Amounts in thousands) Homecare $ 67,468 83.8% $ 20,782 85.0% 30.8% Nursing Homes 7,309 9.1% 2,336 9.6% 32.0% Hospitals 5,731 7.1% 1,333 5.4% 23.3% -------- -------- Total, at constant exchange rates 80,508 24,451 30.4% Effect of foreign exchange (17,405) (5,278) -------- -------- Total, as reported $ 63,103 $ 19,173 ======== -------- SG&A, at constant exchange rates $ 20,473 Effect of foreign exchange (4,197) -------- SG&A, as reported $ 16,276 -------- Operating Income, at constant exchange rates $ 3,978 Effect of foreign exchange (1,081) -------- Operating Income, as reported $ 2,897 ======== Quarter Ended June 30, 2008 ------------------------------------------------- Gross Gross Revenue % Margin % Margin % --------- -------- --------- -------- -------- (Amounts in thousands) Homecare $ 57,497 76.7% $ 18,351 79.4% 31.9% Nursing Homes 9,783 13.0% 3,018 13.0% 30.8% Hospitals 7,744 10.3% 1,751 7.6% 22.6% --------- --------- Total, at constant exchange rates 75,024 23,120 30.8% Effect of foreign exchange - - --------- --------- Total, as reported $ 75,024 $ 23,120 ========= --------- SG&A, at constant exchange rates $ 19,437 Effect of foreign exchange - --------- SG&A, as reported $ 19,437 --------- Operating Income, at constant exchange rates $ 3,683 Effect of foreign exchange - --------- Operating Income, as reported $ 3,683 =========
Nine Months Ended June 30, 2009 ----------------------------------------------------- Gross Gross Revenue % Margin % Margin % --------- --------- --------- --------- --------- (Amounts in thousands) Homecare $ 191,156 80.8% $ 59,491 82.1% 31.1% Nursing Homes 25,349 10.8% 7,919 10.9% 31.2% Hospital Staffing 19,935 8.4% 5,049 7.0% 25.3% --------- --------- Total, at constant exchange rates 236,440 72,459 30.6% Effect of foreign exchange (56,475) (17,307) --------- --------- Total, as reported $ 179,965 $ 55,152 ========= --------- SG&A, at constant exchange rates $ 59,997 Effect of foreign exchange (13,773) --------- SG&A, as reported $ 46,224 --------- Operating Income, at constant exchange rates $ 12,462 Effect of foreign exchange (3,534) --------- Operating Income, as reported $ 8,928 ========= Nine Months Ended June 30, 2008 ------------------------------------------------------ Gross Gross Revenue % Margin % Margin % ---------- --------- ---------- --------- --------- (Amounts in thousands) Homecare $ 167,991 75.1% $ 52,491 77.8% 31.2% Nursing Homes 32,123 14.4% 9,661 14.3% 30.1% Hospital Staffing 23,495 10.5% 5,322 7.9% 22.7% ---------- ---------- Total, at constant exchange rates 223,609 67,474 30.2% Effect of foreign exchange - - ---------- ---------- Total, as reported $ 223,609 $ 67,474 ========== ---------- SG&A, at constant exchange rates $ 59,085 Effect of foreign exchange - ---------- SG&A, as reported $ 59,085 ---------- Operating Income, at constant exchange rates $ 8,389 Effect of foreign exchange - ---------- Operating Income, as reported $ 8,389 ==========
Q1 2009 Q2 2009 Q3 2009 --------------------- --------------------- --------------------- Gross Gross Gross Revenue Margin Revenue Margin Revenue Margin ---------- ---------- ---------- ---------- ---------- ---------- (Amounts in thousands) Homecare GBP 30,620 GBP 9,487 GBP 30,858 GBP 9,753 GBP 34,162 GBP 10,525 Nursing Homes 4,808 1,477 4,159 1,298 3,716 1,187 Hospital Staffing 3,612 973 3,448 874 2,914 679 ---------- ---------- ---------- ---------- ---------- ---------- Total GBP 39,040 GBP 11,937 GBP 38,465 GBP 11,925 GBP 40,792 GBP 12,391 Foreign exchange rate 1.58 1.58 1.44 1.44 1.55 1.55 ---------- ---------- ---------- ---------- ---------- ---------- Total $ 61,528 $ 18,813 $ 55,334 $ 17,166 $ 63,103 $ 19,173 ========== ========== ========== ========== ========== ========== Q1 2008 Q2 2008 ------------------------- ------------------------- Gross Gross Revenue Margin Revenue Margin ------------ ------------ ------------ ------------ (Amounts in thousands) Homecare GBP 27,358 GBP 8,491 GBP 27,561 GBP 8,476 Nursing Homes 5,730 1,706 5,373 1,596 Hospital Staffing 3,473 767 4,358 1,009 ------------ ------------ ------------ ------------ Total GBP 36,561 GBP 10,964 GBP 37,292 GBP 11,081 Foreign exchange rate 2.05 2.05 1.98 1.98 ------------ ------------ ------------ ------------ Total $ 74,770 $ 22,423 $ 73,815 $ 21,931 ============ ============ ============ ============ Q3 2008 Q4 2008 ------------------------- ------------------------- Gross Gross Revenue Margin Revenue Margin ------------ ------------ ------------ ------------ (Amounts in thousands) Homecare GBP 29,130 GBP 9,294 GBP 30,218 GBP 9,447 Nursing Homes 4,969 1,531 5,140 1,554 Hospital Staffing 3,926 888 4,088 1,050 ------------ ------------ ------------ ------------ Total GBP 38,025 GBP 11,713 GBP 39,446 GBP 12,051 Foreign exchange rate 1.97 1.97 1.90 1.90 ------------ ------------ ------------ ------------ Total $ 75,024 $ 23,120 $ 74,968 $ 22,911 ============ ============ ============ ============
ALLIED HEALTHCARE INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended -------------------- -------------------- June 30, June 30, June 30, June 30, 2009 2008 2009 2008 ---------- --------- --------- --------- Revenues: Net patient services $ 63,103 $ 75,024 $ 179,965 $ 223,609 ---------- --------- --------- --------- Cost of revenues: Patient services 43,930 51,904 124,813 156,135 ---------- --------- --------- --------- Gross profit 19,173 23,120 55,152 67,474 Selling, general and administrative expenses 16,276 19,437 46,224 59,085 ---------- --------- --------- --------- Operating income 2,897 3,683 8,928 8,389 Interest income 76 216 453 620 Interest expense - (388) (12) (491) Foreign exchange income (loss) 307 (2) (60) (151) ---------- --------- --------- --------- Income before income taxes and discontinued operations 3,280 3,509 9,309 8,367 Provision for income taxes 892 1,056 2,310 2,472 ---------- --------- --------- --------- Income from continuing operations 2,388 2,453 6,999 5,895 ---------- --------- --------- --------- Discontinued operations: Income from discontinued operations, net of taxes - - 367 - ---------- --------- --------- --------- Net income $ 2,388 $ 2,453 $ 7,366 $ 5,895 ========== ========= ========= ========= Basic and diluted net income per share of common stock Income from continuing operations $ 0.05 $ 0.05 $ 0.15 $ 0.13 Income from discontinued operations - - 0.01 - ---------- --------- --------- --------- Net income per share of common stock $ 0.05 $ 0.05 $ 0.16 $ 0.13 ========== ========= ========= ========= Weighted average number of common shares outstanding: Basic 44,986 44,986 44,986 44,986 ========== ========= ========= ========= Diluted 44,998 44,993 44,990 45,075 ========== ========= ========= ========= ALLIED HEALTHCARE INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) June 30, September 30, 2009 2008 (Unaudited) ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 33,660 $ 26,199 Restricted Cash - 136 Accounts receivable, less allowance for doubtful accounts of $676 and $823, respectively 16,609 17,774 Unbilled accounts receivable 15,355 15,892 Deferred income taxes 372 474 Prepaid expenses and other assets 1,581 1,375 Assets of discontinued operations - 182 ------------ ------------ Total current assets 67,577 62,032 Property and equipment, net 8,076 8,574 Goodwill 99,550 109,292 Other intangible assets, net 2,041 3,345 Taxes receivable - 19 ------------ ------------ Total assets $ 177,244 $ 183,262 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,142 $ 1,614 Accrued expenses, inclusive of payroll and related expenses 26,391 28,244 Taxes payable 777 - Liabilities of discontinued operations - 624 ------------ ------------ Total current liabilities 28,310 30,482 Deferred income taxes 62 110 ------------ ------------ Total liabilities 28,372 30,592 ------------ ------------ Commitments and contingencies Shareholders' equity: Preferred stock, $.01 par value; authorized 10,000 shares, issued and outstanding - none - - Common stock, $.01 par value; authorized 80,000 shares, issued 45,571 shares 456 456 Additional paid-in capital 241,385 241,018 Accumulated other comprehensive (loss) income (9,712) 1,819 Accumulated deficit (80,963) (88,329) ------------ ------------ 151,166 154,964 Less cost of treasury stock (585 shares) (2,294) (2,294) ------------ ------------ Total shareholders' equity 148,872 152,670 ------------ ------------ Total liabilities and shareholders' equity $ 177,244 $ 183,262 ============ ============ ALLIED HEALTHCARE INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended June 30, June 30, 2009 2008 ----------- ----------- Cash flows from operating activities: Net income $ 7,366 $ 5,895 Adjustments to reconcile net income to net cash provided by operating activities: Income from discontinued operations (367) - Depreciation and amortization 1,880 2,470 Amortization of intangible assets 921 1,252 Foreign exchange gain (221) - Increase (decrease) in provision for allowance for doubtful accounts 100 (580) Loss (gain) on sale of fixed assets 11 (22) Stock based compensation 366 669 Deferred income taxes (246) (42) Changes in operating assets and liabilities, excluding the effect of businesses acquired and sold: (Increase) decrease in accounts receivable (518) 670 Increase in prepaid expenses and other assets (1,137) (2,221) Increase (decrease) in accounts payable and other liabilities 2,875 (3,264) ----------- ----------- Net cash provided by continuing operations 11,030 4,827 Net cash used in discontinued operations - (569) ----------- ----------- Net cash provided by operating activities 11,030 4,258 ----------- ----------- Cash flows from investing activities: Capital expenditures (2,152) (2,146) Proceeds from sale of business 114 54,334 Proceeds from sale of property and equipment 1 48 Payments on acquisitions payable (171) - ----------- ----------- ----------- ----------- Net cash (used in) provided by investing activities (2,208) 52,236 ----------- ----------- Cash flows from financing activities: Payments on revolving loan - (24,984) Payments on invoice discounting facility - (4,516) Payments on long-term debt - (23,984) Proceeds from sale of interest rate swap agreements - 625 ----------- ----------- Net cash used in financing activities - (52,859) ----------- ----------- Effect of exchange rate on cash (1,361) 1 ----------- ----------- Increase in cash 7,461 3,636 Cash and cash equivalents, beginning of period 26,199 20,241 ----------- ----------- Cash and cash equivalents, end of period $ 33,660 $ 23,877 =========== =========== Supplemental cash flow information: Cash paid for interest $ 300 $ 1,149 =========== =========== Cash paid for income taxes, net $ 137 $ 4,036 =========== ===========
