TIDMAHI
RNS Number : 4231L
Allied Healthcare International Inc
06 May 2010
Allied Healthcare International Inc. Reports Fiscal 2010 Second Quarter Results
Revenues Increased 18.4% to $65.5 Million; Operating Income Increased 29.7% to
$3.6 Million; Income From Continued Operations Increased 23.2% to $2.6 Million,
or $0.06 per Diluted Share
NEW YORK, NY--(Marketwire - May 6, 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 second quarter ended March 31, 2010.
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 ten 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 Second Quarter Results
Revenue Gross Profit
----------------------- -----------------------------------
Three Months Ended Three Months Ended
March 31, March 31,
----------------------- -----------------------------------
Gross Gross
% Profit Profit %
2010 2009 Change 2010 % 2009 % Change
------------------------ ------------------------------------
(Amounts in
thousands)
Homecare $ 51,621 $ 44,439 16.2% $ 15,957 30.9% $ 14,059 31.6% 13.5%
Nursing Homes 4,095 5,943 -31.1% 1,334 32.6% 1,856 31.2% -28.1%
Hospitals 4,652 4,952 -6.1% 1,091 23.5% 1,251 25.3% -12.8%
-------- -------- -------- --------
Total, at
constant
exchange
rates 60,368 55,334 9.1% 18,382 30.4% 17,166 31.0% 7.1%
Effect of
foreign
exchange 5,162 - 1,566 -
-------- -------- -------- --------
Total, as
reported $ 65,530 $ 55,334 18.4% $ 19,948 $ 17,166 16.2%
======== ======== -------- --------
SG&A, at
constant
exchange
rates $ 15,120 $ 14,389 5.1%
Effect of
foreign
exchange 1,226 -
-------- --------
Total SG&A,
as reported $ 16,346 $ 14,389 13.6%
-------- --------
Operating
Income, at
constant
exchange
rates $ 3,262 $ 2,777 17.5%
Effect of
foreign
exchange 340 -
-------- --------
Operating
Income, as
reported $ 3,602 $ 2,777 29.7%
======== ========
For the second quarter of fiscal 2010 total revenue increased 9.1%, to $60.3
million, compared with $55.3 million reported during the same period in fiscal
2009. Allied's Homecare revenue grew 16.2% to $51.6 million, while Nursing Homes
revenue declined 31.1% to $4.1 million and Hospitals revenue declined 6.1% to
$4.6 million. After the favorable impact of currency exchange of $5.2 million,
revenue increased 18.4% year over year to the reported $65.5 million.
Total gross profit for the second fiscal quarter increased 7.1% to $18.4
million, from $17.2 million for the comparable quarter in fiscal 2009. Gross
profit as a percentage of revenue was 30.4%, compared with 31.0% for the
comparable prior-year period. Foreign exchange increased gross profit by $1.5
million to the reported $19.9 million for the 2010 second fiscal quarter.
SG&A for the second fiscal quarter was $15.1 million (24.9% of revenues), an
increase of 5.1%, from $14.4 million (26.0% of revenues) reported last year.
Foreign exchange increased costs by $1.2 million to the reported $16.3 million
for the 2010 second fiscal quarter.
Operating income for the second quarter of fiscal 2010 increased 17.5% to $3.3
million from $2.8 million a year ago. Foreign exchange increased operating
income by $0.3 million to the reported $3.6 million for the 2010 second fiscal
quarter.
Income from continuing operations for the second quarter of fiscal 2010 was $2.6
million, or $0.06 per diluted share, compared with $2.1 million, $0.05 per
diluted share, reported during the 2009 second fiscal quarter.
Fiscal Six Months Results
Revenue Gross Profit
------------------------- -----------------------------------
Six Months Ended Six Months Ended March
March 31, March 31,
------------------------- -----------------------------------
Gross Gross
% Profit Profit %
2010 2009 Change 2010 % 2009 % Change
------------------------- -----------------------------------
(Amounts in
thousands)
Homecare $ 108,204 $ 92,696 16.7% $ 33,357 30.8% $ 29,011 31.3% 15.0%
Nursing
Homes 9,234 13,521 -31.7% 2,962 32.1% 4,184 30.9% -29.2%
Hospitals 9,900 10,645 -7.0% 2,214 22.4% 2,784 26.2% -20.5%
--------- --------- -------- --------
Total, at
constant
exchange
rates 127,338 116,862 9.0% 38,533 30.3% 35,979 30.8% 7.1%
Effect of
foreign
exchange 7,576 - 2,292 -
--------- --------- -------- --------
Total, as
reported $ 134,914 $ 116,862 15.4% $ 40,825 $ 35,979 13.5%
========= ========= -------- --------
SG&A, at
constant
exchange
rates $ 31,629 $ 29,948 5.6%
Effect of
foreign
exchange 1,797 -
-------- --------
Total SG&A,
as
reported $ 33,426 $ 29,948 11.6%
-------- --------
Operating
Income, at
constant
exchange
rates $ 6,904 $ 6,031 14.5%
Effect of
foreign
exchange 495 -
-------- --------
Operating
Income, as
reported $ 7,399 $ 6,031 22.7%
======== ========
For the six months of fiscal 2010 total revenue increased 9.0%, to $127.3
million, compared with $116.9 million for the same period in fiscal 2009.
Allied's Homecare revenue grew 16.7% to $108.2 million, while Nursing Homes
revenue declined 31.7% to $9.2 million and Hospitals revenue declined 7.0% to
$9.9 million. After the favorable impact of currency exchange of $7.6 million,
revenue increased 15.4% year over year to the reported $134.9 million for the
fiscal 2010 six-month period.
Total gross profit for the six months of fiscal 2010 increased 7.1% to $38.5
million, from $36.0 million for the comparable period in fiscal 2009. Gross
profit as a percentage of revenue was 30.3%, compared with 30.8% for the
comparable prior-year period. Foreign exchange increased gross profit by $2.3
million to the reported $40.8 million for the fiscal 2010 six-month period.
SG&A for the six months of fiscal 2010 was $31.6 million (24.8% of revenues), an
increase of 5.6%, from $29.9 million (25.6% of revenues) reported last year.
Foreign exchange increased costs by $1.8 million to the reported $33.4 million
for the fiscal 2010 six month period.
Operating income for the six months of fiscal 2010 increased 14.5% to $6.9
million from $6.0 million a year ago. Foreign exchange increased operating
income by $0.5 million to the reported $7.4 million for the fiscal 2010 six
month period.
Income from continuing operations for the six months of fiscal 2010 was $5.5
million, or $0.12 per diluted share, compared with $4.6 million, $0.10 per
diluted share, reported during the fiscal 2009 six month period.
Cash balance at March 31, 2010 was $41.6 million (GBP27.6 million) as compared
to $35.8 million (GBP22.5 million) at December 31, 2009. The increase was
primarily due to the benefit, approximately GBP2.2 million, of accelerated cash
collections, mainly from the local governmental bodies, as a result of the end
of their fiscal period.
For the fiscal six months ended March 31, 2010, capital expenditures were $2.1
million.
Management Discussion:
Sandy Young, Chief Executive Officer of Allied, commented, "Allied's Homecare
revenue increased by 16.2%, compared to the same quarter last year due to the
success we had in implementing new contracts in quarter three and quarter four
of last year in our London area. The pending U.K. political change from today's
election is impacting local authority and Primary Care Trusts decision making
while they await the future direction of policy making related to health and
social care. While all the main political parties support more care at home,
which is away from more expensive residential care, the method of procurement
and the extent of some of the current initiatives, like personalization and
independent budgets, should become clearer over the next twelve months.
"We continue to believe that the current market dynamics, such as an aging
population, the lower cost of Homecare provision, the continued consolidation of
local authority suppliers and the continued increase in demand from Primary Care
Trusts, all favor future growth in demand for Homecare services. However, there
will be an inevitable tightening of public sector budgets and we may see some
price pressures arising from the current state of the public finances.
"Our Nursing Homes business is significantly lower than this time last year but
some of our growth project trials seem to have slowed down the rate of decline.
We continue to monitor whether these will help us stabilize this business.
However, we still see no clear sign of any improvement as the market for Nursing
Homes services, in general, appears to be depressed and there is the move to
provide more care in the current home environment.
"Revenue from our Hospitals business decreased by 6.1% from this time last year.
However, our performance, both in terms of revenue and gross margin, was very
similar to last quarter. This is despite evidence that in March 2010, as the NHS
hospitals reached the end of their financial year end, demand for agency staff
was reduced. The new English national framework agreement, which came into
effect last October, seems to be working better than the old framework
agreement. In addition, we are in the process of tendering for the Scottish and
Wales framework agreements. Our new Midland hospital business hub has now opened
and we hope to see benefits arising from it in our next financial year. If
successful, we will consider extending this hub approach into other key cities."
Mr. Young concluded, "As previously reported, we continue to look at strategic
acquisitions to grow the business as well as to focus on organic growth and
other opportunities to enhance shareholder value."
Conference Call Information: May 6, 2010 at 10:00 AM Eastern Time / 3:00 PM UK
Time
Allied will host a call and webcast today at 10:00 AM Eastern Time / 3:00 PM UK
Time, to discuss its financial results. To join the call, please dial (877)
407-8031 for domestic participants, and (201) 689-8031 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 349813. 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 Six Months Ended
-------------------- --------------------
March 31, March 31, March 31, March 31,
2010 2009 2010 2009
--------- --------- --------- ---------
Revenues:
Net patient services $ 65,530 $ 55,334 $ 134,914 $ 116,862
--------- --------- --------- ---------
Cost of revenues:
Patient services 45,582 38,168 94,089 80,883
--------- --------- --------- ---------
Gross profit 19,948 17,166 40,825 35,979
Selling, general and
administrative expenses 16,346 14,389 33,426 29,948
--------- --------- --------- ---------
Operating income 3,602 2,777 7,399 6,031
Interest income 86 115 191 379
Interest expense - (7) - (14)
Foreign exchange loss (195) (45) (213) (367)
--------- --------- --------- ---------
Income before income
taxes and
discontinued
operations 3,493 2,840 7,377 6,029
Provision for income taxes 851 696 1,881 1,418
--------- --------- --------- ---------
Income from
continuing
operations 2,642 2,144 5,496 4,611
--------- --------- --------- ---------
Discontinued operations:
Income from discontinued
operations, net of taxes - 367 - 367
--------- --------- --------- ---------
Net income $ 2,642 $ 2,511 $ 5,496 $ 4,978
========= ========= ========= =========
Basic and diluted net income
per share of common stock
Income from
continuing
operations $ 0.06 $ 0.05 $ 0.12 $ 0.10
Income from
discontinued
operations - 0.01 - 0.01
--------- --------- --------- ---------
Net income per share of common
stock $ 0.06 $ 0.06 $ 0.12 $ 0.11
========= ========= ========= =========
Weighted average number of
common shares outstanding:
Basic 45,136 44,986 45,131 44,986
========= ========= ========= =========
Diluted 45,405 44,986 45,411 44,986
========= ========= ========= =========
ALLIED HEALTHCARE INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
March 31, September 30,
2010 2009
(Unaudited)
=============== ===============
ASSETS
Current assets:
Cash and cash equivalents $ 41,571 $ 35,273
Accounts receivable, less allowance for
doubtful accounts of $677 and $839,
respectively 17,287 19,594
Unbilled accounts receivable 10,468 11,572
Deferred income taxes 407 389
Prepaid expenses and other assets 1,570 1,188
--------------- ---------------
Total current assets 71,303 68,016
Property and equipment, net 8,441 7,756
Goodwill 90,665 95,649
Other intangible assets, net 968 1,646
--------------- ---------------
Total assets $ 171,377 $ 173,067
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 839 $ 1,186
Accrued expenses, inclusive of payroll
and related expenses 23,304 24,304
Taxes payable 873 201
--------------- ---------------
Total current liabilities 25,016 25,691
Deferred income taxes 115 103
--------------- ---------------
Total liabilities 25,131 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 242,054 241,555
Accumulated other comprehensive loss (21,441) (14,418)
Accumulated deficit (72,530) (78,026)
--------------- ---------------
148,540 149,567
Less cost of treasury stock (585 shares) (2,294) (2,294)
--------------- ---------------
Total shareholders' equity 146,246 147,273
--------------- ---------------
Total liabilities and
shareholders' equity $ 171,377 $ 173,067
=============== ===============
ALLIED HEALTHCARE INTERNATIONAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
--------------------
March 31, March 31,
2010 2009
--------- ---------
Cash flows from operating activities:
Net income $ 5,496 $ 4,978
Adjustments to reconcile net income to net
cash provided by operating activities:
Income from discontinued operations - (367)
Depreciation and amortization 1,467 1,198
Amortization of intangible assets 625 608
Foreign exchange loss 187 104
(Decrease) increase in allowance for
doubtful accounts (39) 106
Loss on sale of fixed assets 1 5
Stock based compensation 213 198
Deferred income taxes 25 1,403
Changes in operating assets and liabilities,
excluding the effect of businesses acquired
and sold:
Decrease in accounts receivable 1,376 2,920
Decrease (increase) in prepaid expenses
and other assets 47 (1,700)
Increase (decrease) in accounts payable
and other liabilities 980 (2)
--------- ---------
Net cash provided by continuing
operations 10,378 9,451
--------- ---------
Cash flows from investing activities:
Capital expenditures (2,066) (1,574)
Proceeds from sale of business - 113
Proceeds from sale of property and equipment 56 1
Payments on acquisitions payable - (170)
--------- ---------
Net cash used in investing activities (2,010) (1,630)
--------- ---------
Cash flows from financing activities:
Stock options exercised 288 -
--------- ---------
Net cash provided by financing
activities 288 -
--------- ---------
Effect of exchange rate on cash (2,358) (5,948)
--------- ---------
Increase in cash 6,298 1,873
Cash and cash equivalents, beginning of period 35,273 26,199
--------- ---------
Cash and cash equivalents, end of period $ 41,571 $ 28,072
========= =========
Supplemental cash flow information:
Cash paid for interest $ - $ 14
========= =========
Cash paid for income taxes, net $ 217 $ -
========= =========
Supplemental disclosure of non-cash investing
activities:
Capital expenditures included in accrued expenses $ 623 $ -
========= =========
ALLIED HEALTHCARE INTERNATIONAL INC.
HISTORICAL REVENUE AND GROSS PROFIT
(In thousands, except foreign exchange rate)
(Unaudited)
Revenue
---------- ---------- ---------- ---------- ----------
Q2 Q1 Q4 Q3 Q2
2010 2010 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Homecare GBP 35,860 GBP 35,903 GBP 35,763 GBP 34,162 GBP 30,858
Nursing Homes 2,864 3,261 3,986 3,716 4,159
Hospitals 3,235 3,330 2,956 2,914 3,448
---------- ---------- ---------- ---------- ----------
Total GBP 41,959 GBP 42,494 GBP 42,705 GBP 40,792 GBP 38,465
Foreign Exchange
rate 1.56 1.63 1.64 1.55 1.44
---------- ---------- ---------- ---------- ----------
$ 65,530 $ 69,384 $ 69,845 $ 63,103 $ 55,334
========== ========== ========== ========== ==========
Revenue
---------- ---------- ---------- ---------- ----------
Q1 Q4 Q3 Q2 Q1
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Homecare GBP 30,620 GBP 30,218 GBP 29,130 GBP 27,561 GBP 27,358
Nursing Homes 4,808 5,140 4,969 5,373 5,730
Hospitals 3,612 4,088 3,926 4,358 3,473
---------- ---------- ---------- ---------- ----------
Total GBP 39,040 GBP 39,446 GBP 38,025 GBP 37,292 GBP 36,561
Foreign Exchange
rate 1.58 1.90 1.97 1.98 2.05
---------- ---------- ---------- ---------- ----------
$ 61,528 $ 74,968 $ 75,024 $ 73,815 $ 74,770
========== ========== ========== ========== ==========
Gross Profit
---------- ---------- ---------- ---------- ----------
Q2 Q1 Q4 Q3 Q2
2010 2010 2009 2009 2009
---------- ---------- ---------- ---------- ----------
Homecare GBP 11,083 GBP 11,041 GBP 10,951 GBP 10,525 GBP 9,753
Nursing Homes 931 1,033 1,257 1,187 1,298
Hospitals 755 712 745 679 874
---------- ---------- ---------- ---------- ----------
Total GBP 12,769 GBP 12,786 GBP 12,953 GBP 12,391 GBP 11,925
Foreign Exchange
rate 1.56 1.63 1.64 1.55 1.44
---------- ---------- ---------- ---------- ----------
$ 19,948 $ 20,877 $ 21,196 $ 19,173 $ 17,166
========== ========== ========== ========== ==========
Gross Profit
---------- ---------- ---------- ---------- ----------
Q1 Q4 Q3 Q2 Q1
2009 2008 2008 2008 2008
---------- ---------- ---------- ---------- ----------
Homecare GBP 9,487 GBP 9,447 GBP 9,294 GBP 8,476 GBP 8,491
Nursing Homes 1,477 1,554 1,531 1,596 1,706
Hospitals 973 1,050 888 1,009 767
---------- ---------- ---------- ---------- ----------
Total GBP 11,937 GBP 12,051 GBP 11,713 GBP 11,081 GBP 10,964
Foreign Exchange
rate 1.58 1.90 1.97 1.98 2.05
---------- ---------- ---------- ---------- ----------
$ 18,813 $ 22,911 $ 23,120 $ 21,931 $ 22,423
========== ========== ========== ========== ==========
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
1200
sherry.bertner@icrinc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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