TIDMAHI
RNS Number : 8671G
Allied Healthcare International Inc
09 February 2010
Allied Healthcare International Inc. Reports Fiscal 2010 First Quarter Results
=- Revenues Increased 12.8% to $69.4 million
=- Operating Income Increased 16.7% to $3.8 million
=- Net Income Increased 15.7% to $2.9 million, or $0.06 per diluted share
NEW YORK, NY--(Marketwire - February 9, 2010) - Allied Healthcare International
Inc. (NASDAQ: AHCI) (AIM: AHI), a leading provider of flexible healthcare
staffing services in the United Kingdom, today issued financial results for its
fiscal 2010 first quarter ended December 31, 2009.
To provide investors with a better understanding of the Company's performance
and because of fluctuations in foreign exchange rates, Allied is discussing its
revenue, gross profit, selling, general & administrative (SG&A) expenses and
operating income at constant exchange rates, which are calculated using the
comparable prior period weighted average exchange rates. In addition, as the
Company's revenue and gross profit are generated in the United Kingdom, an
analysis, which is contained in the Historical Revenue and Gross Profit table at
the end of this press release, is included of the last nine quarters' revenue
and gross profit in pounds sterling to enable investors to fully understand the
underlying trends over these periods without the effects of currency exchange
rates.
Fiscal First Quarter Results
Revenue Gross Profit
----------------------- -----------------------------------
Gross Gross
Q1 Q1 % Q1 Profit Q1 Profit %
2010 2009 Change 2010 % 2009 % Change
-------- -------- ----- -------- ---- -------- ---- -----
(Amounts in
thousands)
Homecare $ 56,583 $ 48,257 17.3% $ 17,400 30.8% $ 14,952 31.0% 16.4%
Nursing Homes 5,139 7,578 -32.2% 1,628 31.7% 2,328 30.7% -30.1%
Hospitals 5,248 5,693 -7.8% 1,123 21.4% 1,533 26.9% -26.7%
-------- -------- -------- --------
Total, at
constant
exchange
rates 66,970 61,528 8.8% 20,151 30.1% 18,813 30.6% 7.1%
Effect of
foreign
exchange 2,414 - 726 -
-------- -------- -------- --------
Total, as
reported $ 69,384 $ 61,528 12.8% $ 20,877 $ 18,813 11.0%
======== ======== -------- --------
SG&A, at
constant
exchange
rates $ 16,509 $ 15,559 6.1%
Effect of
foreign
exchange 571 -
-------- --------
Total SG&A,
as reported $ 17,080 $ 15,559 9.8%
-------- --------
Operating
Income, at
constant
exchange
rates $ 3,642 $ 3,254 11.9%
Effect of
foreign
exchange 155 -
-------- --------
Operating
Income, as
reported $ 3,797 $ 3,254 16.7%
======== ========
For the first quarter of fiscal 2010 total revenue increased 8.8%, to $67.0
million, compared with $61.5 million reported during the same period in fiscal
2009. Allied's Homecare revenue grew 17.3% to $56.6 million, while Nursing Homes
revenue declined 32.2% to $5.1 million and Hospitals revenue declined 7.8% to
$5.3 million. After the favorable impact of currency exchange of $2.4 million,
revenue increased 12.8% year over year to the reported $69.4 million for the
2010 first fiscal quarter.
Total gross profit for the first fiscal quarter increased 7.1% to $20.2 million,
from $18.8 million for the comparable quarter in fiscal 2009. Gross profit as a
percentage of revenue was 30.1%, compared with 30.6% for the comparable
prior-year period. Foreign exchange increased gross profit by $0.7 million to
the reported $20.9 million for the 2010 first fiscal quarter.
SG&A for the first fiscal quarter was $16.5 million (24.7% of revenues), an
increase of 6.1%, from $15.6 million (25.3% of revenues) reported last year.
Foreign exchange increased costs by $0.6 million to the reported $17.1 million
for the 2010 first fiscal quarter.
Operating income for the first quarter of fiscal 2010 increased 11.9% to $3.6
million from $3.3 million a year ago. Foreign exchange increased operating
income by $0.2 million to the reported $3.8 million for the 2010 first fiscal
quarter.
Net income for the first quarter of fiscal 2010 was $2.9 million, or $0.06 per
diluted share, compared with $2.5 million, or $0.05 per diluted share, reported
during the 2009 first fiscal quarter.
Management Discussion:
Sandy Young, Chief Executive Officer of Allied, commented, "Allied's Homecare
revenue increased by 17.3%, exceeding our expected growth range of 10-15%. We
continue to believe the current market dynamics, such as an aging population,
the lower cost of Homecare provision and the continued consolidation of local
authority suppliers, all favor growth in demand for our Homecare services. We
also remain positive about the opportunities ahead of our Continuing Care and
Learning Disability businesses.
"We have noticed recently that some local authorities and Primary Care Trusts
are using consultants to review pricing and margins. This is to be expected with
the current public sector debt levels and anticipated controls on spending after
this year's U.K. elections. We will continue to monitor this closely.
"The deterioration in our Nursing Homes business continues and although we have
trialed some growth projects, there is no clear sign of any improvement to this
business as the market for Nursing Homes services, in general, appears to be
depressed.
"Our Hospitals business revenues decreased by 7.8%. However, our London hospital
staffing branch, which represents over 70% of our Hospitals revenue, grew by
over 50% and was successful in maintaining a gross profit percentage similar to
that of the prior year. However, this was offset by significant declines in our
regional Hospitals business, which traditionally was at higher margins. We
believe that our plan to open a dedicated Hospitals branch in the Midlands
region is a sensible approach to growing this regional business on a similar
model as our London operation. If successful, we will consider extending this
hub approach into other key cities.
"We continue to make investments to improve our service and quality, and our IT
rollout continues as planned with a targeted completion date in the second half
of 2011. At that stage, we will have a standard IT platform across our branches
which will allow us to utilize technology to a much greater extent in the
administration, management and control of our care services. To date we have
over 30 branches utilizing the new system and we incurred operating expenses
associated with the Coldharbour project of $0.3 million in the first quarter of
fiscal 2010 as compared to $0.1 million in the same quarter last year."
Mr. Young concluded, "Following completion of the capital resources review by
Piper Jaffray, the Board has concluded that the Company is well placed in an
expanding market to pursue accretive strategic acquisitions in the near term. In
addition to these acquisition opportunities, the Company continues to focus on
organic growth and enhancing shareholder value."
Paul Weston, Chief Financial Officer of Allied, said, "We are pleased with our
financial performance during the quarter. Our strong financial condition with a
cash balance at the end of the quarter of $35.8 million (GBP22.5 million) and
positive cash flow provides our Company with sufficient resources to fund our
strategic initiatives and expand our market footprint."
Conference Call Information: February 9, 2010 at 10:00 AM EST / 3:00 PM GMT
Allied will host a call and webcast today at 10:00 AM EST/3:00 PM GMT, to
discuss its financial results. To join the call, please dial (877) 407-0778 for
domestic participants, and (201) 689-8565 for international participants.
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 343188. The presentation will be available and archived on the Company's
website for ninety days.
Reconciliation of GAAP and Non-GAAP Data
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.
ABOUT ALLIED HEALTHCARE INTERNATIONAL INC.
Allied Healthcare International Inc. is a leading provider of flexible
healthcare staffing services in the United Kingdom. Allied operates a
community-based network of over 110 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. For more news and information please visit: www.alliedhealthcare.com.
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, other healthcare facility clients and
private clients on terms attractive to Allied; the general level of demand for
healthcare and social care; dependence on the proper functioning of Allied's
information systems; the effect of existing or future government regulation of
the healthcare and social care 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.
ALLIED HEALTHCARE INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
December 31, December 31,
2009 2008
------------ ------------
Revenues:
Net patient services $ 69,384 $ 61,528
------------ ------------
Cost of revenues:
Patient services 48,507 42,715
------------ ------------
Gross profit 20,877 18,813
Selling, general and administrative expenses 17,080 15,559
------------ ------------
Operating income 3,797 3,254
Interest income 105 264
Interest expense - (7)
Foreign exchange loss (18) (322)
------------ ------------
Income before income taxes 3,884 3,189
Provision for income taxes 1,030 722
------------ ------------
Net income $ 2,854 $ 2,467
============ ============
Basic and diluted net income per share of
common stock $ 0.06 $ 0.05
============ ============
Weighted average number of common shares
outstanding:
Basic 45,127 44,986
============ ============
Diluted 45,417 44,986
============ ============
ALLIED HEALTHCARE INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
December 31, September 30,
2009 2009
(Unaudited)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 35,811 $ 35,273
Accounts receivable, less allowance for
Doubtful accounts of $923 and $839, 19,679 19,594
respectively
Unbilled accounts receivable 12,833 11,572
Deferred income taxes 451 389
Prepaid expenses and other assets 1,866 1,188
------------ ------------
Total current assets 70,640 68,016
Property and equipment, net 7,833 7,756
Goodwill 95,684 95,649
Other intangible assets, net 1,330 1,646
Deferred income taxes 42 -
------------ ------------
Total assets $ 175,529 $ 173,067
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 983 $ 1,186
Accrued expenses, inclusive of payroll and
related expenses 22,635 24,304
Taxes payable 1,395 201
------------ ------------
Total current liabilities 25,013 25,691
Deferred income taxes - 103
------------ ------------
Total liabilities 25,013 25,794
------------ ------------
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 45,721 and 45,571
shares, respectively 457 456
Additional paid-in capital 241,957 241,555
Accumulated other comprehensive loss (14,432) (14,418)
Accumulated deficit (75,172) (78,026)
------------ ------------
152,810 149,567
Less cost of treasury stock (585 shares) (2,294) (2,294)
------------ ------------
Total shareholders' equity 150,516 147,273
------------ ------------
Total liabilities and shareholders'
equity $ 175,529 $ 173,067
============ ============
ALLIED HEALTHCARE INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
December 31, December 31,
2009 2008
------------ ------------
Cash flows from operating activities:
Net income $ 2,854 $ 2,467
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 728 600
Amortization of intangible assets 324 318
Increase in allowance for doubtful accounts 130 84
Loss on sale of fixed assets 2 -
Foreign exchange loss 15 202
Stock based compensation 115 99
Deferred income taxes (55) 714
Changes in operating assets and liabilities,
excluding the effect of businesses acquired
and sold:
Increase in accounts receivable (209) (4,544)
(Increase) decrease in prepaid expenses and
other assets (1,983) 2,297
Decrease in accounts payable and other
liabilities (859) (427)
------------ ------------
Net cash provided by operating activities 1,062 1,810
------------ ------------
Cash flows from investing activities:
Capital expenditures (806) (718)
Proceeds from sale of business - 118
------------ ------------
Net cash used in investing activities (806) (600)
------------ ------------
Cash flows from financing activities:
Stock options exercised 288 -
------------ ------------
Net cash provided by financing activities 288 -
------------ ------------
Effect of exchange rate on cash (6) (5,336)
------------ ------------
Increase (decrease) in cash 538 (4,126)
Cash and cash equivalents, beginning of period 35,273 26,199
------------ ------------
Cash and cash equivalents, end of period $ 35,811 $ 22,073
============ ============
Supplemental cash flow information:
Cash paid for interest $ - $ 7
============ ============
Supplemental disclosure of non-cash investing
activities:
Capital expenditures included in accrued
expenses $ - $ 431
============ ============
ALLIED HEALTHCARE INTERNATIONAL INC.
HISTORICAL REVENUE AND GROSS PROFIT
(In thousands, except foreign exchange rate)
(Unaudited)
Revenue
------------------------------------------------------
Q1 Q4 Q3 Q2 Q1
2010 2009 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Homecare GBP 35,903 GBP 35,763 GBP 34,162 GBP 30,858 GBP 30,620
Nursing Homes 3,261 3,986 3,716 4,159 4,808
Hospital Staffing 3,330 2,956 2,914 3,448 3,612
---------- ---------- ---------- ---------- ----------
Total GBP 42,494 GBP 42,705 GBP 40,792 GBP 38,465 GBP 39,040
Foreign Exchange
rate 1.63 1.64 1.55 1.44 1.58
---------- ---------- ---------- ---------- ----------
$ 69,384 $ 69,845 $ 63,103 $ 55,334 $ 61,528
========== ========== ========== ========== ==========
Revenue
-------------------------------------------
Q4 Q3 Q2 Q1
2008 2008 2008 2008
---------- ---------- ---------- ----------
Homecare GBP 30,218 GBP 29,130 GBP 27,561 GBP 27,358
Nursing Homes 5,140 4,969 5,373 5,730
Hospital Staffing 4,088 3,926 4,358 3,473
---------- ---------- ---------- ----------
Total GBP 39,446 GBP 38,025 GBP 37,292 GBP 36,561
Foreign Exchange
rate 1.90 1.97 1.98 2.05
---------- ---------- ---------- ----------
$ 74,968 $ 75,024 $ 73,815 $ 74,770
========== ========== ========== ==========
Gross Profit
------------------------------------------------------
Q1 Q4 Q3 Q2 Q1
2010 2009 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Homecare GBP 11,041 GBP 10,951 GBP 10,525 GBP 9,753 GBP 9,487
Nursing Homes 1,033 1,257 1,187 1,298 1,477
Hospital Staffing 712 745 679 874 973
---------- ---------- ---------- ---------- ----------
Total GBP 12,786 GBP 12,953 GBP 12,391 GBP 11,925 GBP 11,937
Foreign Exchange
rate 1.63 1.64 1.55 1.44 1.58
---------- ---------- ---------- ---------- ----------
$ 20,877 $ 21,196 $ 19,173 $ 17,166 $ 18,813
========== ========== ========== ========== ==========
Gross Profit
-------------------------------------------
Q4 Q3 Q2 Q1
2008 2008 2008 2008
---------- ---------- ---------- ----------
Homecare GBP 9,447 GBP 9,294 GBP 8,476 GBP 8,491
Nursing Homes 1,554 1,531 1,596 1,706
Hospital Staffing 1,050 888 1,009 767
---------- ---------- ---------- ----------
Total GBP 12,051 GBP 11,713 GBP 11,081 GBP 10,964
Foreign Exchange
rate 1.90 1.97 1.98 2.05
---------- ---------- ---------- ----------
$ 22,911 $ 23,120 $ 21,931 $ 22,423
========== ========== ========== ==========
Contact:
Allied Healthcare International Inc.
Sandy Young
Chief
Executive Officer
Paul Weston
Chief Financial Officer
+44 (0) 17
8581 0600
Or
Piper Jaffray Ltd. (Nominated Adviser)
Matthew
Flower
Rupert Winckler
+44 (0) 20 3142 8700
Or
ICR,
LLC
Sherry Bertner
Managing Director
+1 646 277
1218
sherry.bertner@icrinc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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