Allied Healthcare Products, Inc. (Allied) has reported net sales of $12.5 million for the second quarter of fiscal 2009, down 1.5%, compared with the net sales of $13.6 million in the year-ago quarter. It has also posted a net loss of $0.43 million, or $0.06 per share, for the second quarter of fiscal 2009, compared with the net income of $6,480, or $0.00 per share, in the year-ago quarter.
The sales turn down reflects two major factors. The first factor is order timing and order releases for a few major customers. The second factor is the end of reimbursement payments by Abbott Labs for certain research and development costs incurred by Allied. Abbott made no payments in the second quarter of this fiscal year against payments totaling $451,000 for the second quarter of last year. Abbott made no payments this year because it had completed its funding agreement with Allied.
For the first half of the fiscal year, Allied net income declined from about $93,500 or 1 cent per share in the prior year period, to a loss of about $227,000, or a loss of about 3 cents per share in the current year period. Net sales for the first two quarters decreased by about 3%, or about $750,000, to about $27 million. Again, $451,000 of the $750,000 decline resulted from the end of reimbursement payments by Abbott.
“Our analysis of first half sales results indicates an anomaly of order and order release timing by long-time customers,” said Earl Refsland, allied president and chief executive officer. “We expect these orders to be restored in the second half of the fiscal year.”
Allied is tracking economic changes for effects on its results, Refsland said, but historically its business has not suffered as much as the overall economy in recessions.
The company incurred one-time production, testing and material costs totaling about $420,000 associated with the introduction of new products in the first two quarters.
In the second quarter, prices for commodity materials such as brass and plastics began to decline and cost-reduction efforts on non-commodity materials started to show positive results. Allied believes that the benefits of these lower costs will further enhance its margins in the second half of the fiscal year.