TIDMAHI
RNS Number : 0017D
Allied Healthcare International Inc
24 November 2009
?
Allied Healthcare International Inc. Reports Fiscal 2009 Fourth Quarter and
Year-End Results
Fourth Quarter Revenues Increase 8.4%, at Constant Exchange Rates
Fourth Quarter Operating Income Increases 16.1%, at Constant Exchange Rates
Fiscal 2009 Revenues Increase 6.4%, at Constant Exchange Rates
Fiscal 2009 Operating Income Increases 37.5%, at Constant Exchange Rates
NEW YORK, NY--(Marketwire - November 24, 2009) - Allied Healthcare International
Inc. (NASDAQ: AHCI) (AIM: AHI)
Fourth Twelve
(In
millions, except EPS) Quarter Months
----------- -----------
Revenues,
as reported $ 69.8 $ 249.8
Revenues,
at constant exchange rates $ 81.2 $ 317.7
Gross
Profit, as reported $ 21.2 $ 76.3
Gross
Profit, at constant exchange rates $ 24.6 $ 97.1
Gross
Profit % 30.3%
30.6%
Operating Income, as reported $ 4.2 $
13.1
Operating Income, at constant exchange rates $ 5.0 $
17.5
Diluted EPS, continuing operations $ 0.07 $
0.22
-----------
=----------
Allied Healthcare International Inc. (http://www.alliedhealthcare.com), a
leading provider of flexible healthcare staffing services in the United Kingdom,
has issued financial results for its fiscal 2009 fourth quarter and year-end.
To provide investors with an increased understanding of the Company's business,
Allied is providing a breakdown of its revenues, gross profits, selling, general
and administrative ("SG&A") costs and operating income at constant exchange
rates using the comparable prior period weighted average exchange rate. Further,
the discussions below as to the fiscal 2009 fourth quarter and year end
comparative analysis with the prior year results also take into account constant
exchange rates. 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 eight 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 Fourth Quarter Results:
For the fourth quarter of fiscal 2009 revenues increased by $6.3 million, or
8.4%, to $81.2 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 18.5% to $68.1 million. Nursing Homes revenues
declined by 22.5% to $7.5 million. Hospitals revenues decreased by 28.2% to $5.6
million. After the unfavorable impact of currency exchange of $11.4 million,
revenues decreased to the reported $69.8 million.
Total gross profit for the fourth fiscal quarter increased 7.5% to $24.6
million, compared with $22.9 million reported for the comparable quarter in
fiscal 2008. Gross profit percent for the fourth quarter was 30.3%, as compared
to 30.6% for the comparable prior period. Foreign exchange decreased gross
profit by $3.4 million to the reported $21.2 million for the quarter.
SG&A for the fourth fiscal quarter was $19.6 million, compared with $18.6
million reported last year, an increase of 5.5%. As a percent of revenues, SG&A
costs were 24.4%, compared to 24.8% in the comparable prior year period. Foreign
exchange decreased costs by $2.6 million to the reported $17.0 million for the
quarter.
Operating income for the fourth quarter of fiscal 2009 increased to $5.0
million, compared to operating income of $4.3 million reported during the 2008
fourth fiscal quarter. Foreign exchange decreased operating income by $0.8
million to the reported $4.2 million for the quarter.
Net income for the fourth quarter of fiscal 2009 was $2.9 million, as compared
with $2.9 million reported during the 2008 fourth fiscal quarter. Diluted
earnings per share was $0.07 for the quarter, compared to diluted earnings per
share of $0.06 last year.
Fiscal 2009 Full Year Results:
For the year ended September 30, 2009 revenues increased by $19.1 million, or
6.4%, to $317.7 million, compared with $298.6 million reported during the same
period in fiscal 2008. Contributing to the increase in revenues was Allied's
Homecare revenues, which grew by 15.0% to $259.3 million. Nursing Homes revenues
declined by 21.4% to $32.9 million. Hospitals revenues decreased by 18.4% to
$25.5 million. After the unfavorable impact of currency exchange of $67.9
million, revenues decreased to the reported $249.8 million.
Total gross profit for the year ended September 30, 2009, increased 7.4% to
$97.1 million, compared with $90.4 million reported for the comparable period in
fiscal 2008. Gross profit percent for the year ended September 30, 2009,
increased to 30.6% from 30.3% for the comparable prior period. Foreign exchange
decreased gross profit by $20.8 million to the reported $76.3 million for the
year.
SG&A for the year ended September 30, 2009, was $79.6 million, compared with
$77.7 million reported last year, an increase of 2.5%. As a percent of revenues,
SG&A costs were 25.3% compared to 26.0% in the comparable prior year period.
Foreign exchange decreased costs by $16.4 million to the reported $63.2 million
for the year.
Operating income for the year ended September 30, 2009, increased to $17.5
million, compared to operating income of $12.7 million reported during the
comparable prior year period, an increase of 37.5% over the prior year. Foreign
exchange decreased operating income by $4.4 million to the reported $13.1
million for the year.
Income from continuing operations for the year ended September 30, 2009,
increased to $9.9 million, as compared with $8.8 million reported for the year
ended September 30, 2008. Diluted earnings per share from continuing operations
was $0.22 for the fiscal year ended September 30, 2009, compared to diluted
earnings per share from continuing operations of $0.19 last year.
Net income for the year ended September 30, 2009, increased to $10.3 million, as
compared with $8.8 million reported during the 2008 fiscal year. Diluted
earnings per share was $0.23 for the year ended September 30, 2009, 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 $0.19
for the year end September 30, 2008.
At September 30, 2009, and September 30, 2008, Allied's cash balance was $35.3
million (GBP22.2 million) and $26.2 million (GBP14.4 million), respectively,
representing an underlying increase in the cash balance of $9.1 million (GBP7.8
million).
For the year ended September 30, 2009, depreciation and amortization was $3.8
million (GBP2.5 million) and capital expenditures were $2.9 million (GBP1.8
million). Days Sales Outstanding was twenty-five days at September 30, 2009 (40
days including unbilled account receivables), and twenty-one days at September
30, 2008 (40 days including unbilled account receivables).
Management Discussion:
"We continue to see good growth in our homecare business, which now represents
over 80% of our business," commented Sandy Young, Chief Executive Officer of
Allied. "The homecare revenue growth in the quarter of 18.5% was particularly
pleasing and was ahead of our 10-15% growth range expectation. The Company's
homecare business should benefit from many favorable market dynamics. These
include: an aging population; continued shift from residential care to homecare;
the lower cost of private business homecare provision; and continued
consolidation of local authority suppliers. These factors all favor a growth in
demand in our core homecare business."
Mr. Young continued: "Even the anticipated further tightening of the local
government and National Health Service (NHS) budgets over the next few years, as
the government addresses its financial deficit, provides an opportunity for us.
We believe that the demonstrated financial benefits of lower costs that have and
can continue to be achieved by homecare, as compared to institutional care,
should be a strong incentive for local governments and NHS Primary Care Trusts,
in addressing the ongoing financial challenges they face.
"While our nursing homes and hospital staffing business results were higher in
the fourth quarter as compared to the third quarter, which is a similar trend as
in the prior year, we continue to look for opportunities for these businesses.
As previously reported, we were successfully awarded the new NHS framework
agreements, which came into effect on October 1, 2009. We have started to enact
the higher pay and charge rates under the new framework agreements which we
believe are essential to effectively recruit and retain staff to service this
business. Expanding upon our existing London operation, we have recently agreed
to lease a Midlands regional office, from which we hope to start business from
in 2010 to service the hospital staffing demand in the central regions of
England.
"Our current period SG&A running costs of 24.4% of revenues compares to 25.8% in
the prior quarter. We are continuing, as previously reported, to invest in
certain areas of our business that include such items as continuing care,
learning disabilities, IT systems, training, 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. Our investment in
training also allows us to qualify for currently available government training
grants, which have given us a net financial benefit of $0.6 million as compared
to the prior year.
"We are pleased with the progress we have made in the year in the key area of
carer and branch staff retention, staff development and support, the progress of
our coldharbour IT system rollout, and our attention to service and quality
delivery, all of which, we believe, create a strong foundation for future growth
for our business. As well as our focus in the quarter on service and quality,
which we believe is essential and a key driver to increased revenue and profit
growth, we have been actively looking at acquisition opportunities. Any such
acquisitions will be reviewed in conjunction with our Capital Resources Review,
which also includes looking at other opportunities to enhance shareholder value.
"We recently re-launched our website which includes details of our key service
offerings and also gives case studies of some of the work the Company is
currently involved in. In addition, our recent major contract wins, our network
of branches, which include three new branches in the London region and one new
branch in Scotland following our successful contract wins, our quality and
governance standards, our investor relations links and our employee and
recruitment information have all been updated and enhanced. We believe that our
current and prospective customers, employees and investors will find our new
website informative and helpful.
"We have also appointed ICR, LLC as our investor relations firm effective
December 2009, which, we believe, will help us to develop further our
relationships with existing and new shareholders."
Mr. Young concluded: "Overall, we are positive about the year ahead. The
business has a more robust operating platform and many of the business
improvement initiatives have yet to be fully implemented. We believe that the
extra investment we have made this year in learning disabilities and continuing
care will help support our top line growth in homecare."
Paul Weston, Chief Financial Officer of Allied, commented: "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 profits year to date of 7.4%, and our fourth quarter gross profit of 30.3%
is in line with our expectations. Our SG&A costs year to date, excluding
exchange effects, increased by 2.5% compared to the prior year which compares
favorably with the revenue growth of 6.4% 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 year
of $17.5 million, excluding exchange, which compares to $12.7 million for the
prior year. This is an increase of 37.5%, 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. As
communicated previously, we are working with Piper Jaffray to assess the best
way to use our capital resources to maximize shareholder value. The Board of
Directors remains confident in the Company's ability to realize opportunities in
the homecare market and achieve its strategies for growth in the years ahead."
Conference Call Information -- November 24, 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, November
24, 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 338036. 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.
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 over 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;
the H1N1 influenza virus which may result in staff being unable to perform
services due to their own illness or due to the illness of patients and may
reduce our revenues; 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.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
Year Ended
September 30,
2009
2008
------------
=-----------
(Audited)
Cash flows from operating activities:
Net income
$ 10,303 $ 8,786
Adjustments to reconcile
net income
to net cash provided by operating
activities:
Income from discontinued
operations
(367) -
Depreciation and amortization
2,590 3,231
Amortization of intangible assets
1,252 1,634
Foreign exchange loss
7 -
Increase (decrease) in provision
for allowance
for doubtful
accounts 360
(167)
Loss on sale of fixed assets 20
166
Stock based compensation 537
812
Deferred income taxes 117
88
Changes in operating assets and
liabilities, excluding the
effect
of businesses acquired and sold:
(Increase) decrease in
accounts
receivable (4,281)
1,579
Decrease (increase) in prepaid
expenses and other assets
2,318 (3,488)
Increase (decrease) in
accounts
payable and other liabilities 2,867
(3,779)
------------
=-----------
Net cash provided by continuing
operations
15,723 8,862
Net cash (used
in) provided by
discontinued operations -
(561)
------------
=-----------
Net cash provided by operating
activities
15,723 8,301
------------ ------------
Cash flows from investing
activities:
Capital expenditures (2,850)
(3,344)
Proceeds from sale of business held
in escrow and
designated for debt
repayment
116 53,638
Proceeds from sale of property and
equipment
1 50
Payments on
acquisitions payable (1,082) -
------------ ------------
------------ ------------
Net cash (used
in) provided by
investing activities
(3,815) 50,344
=----------- ------------
Cash flows from financing activities:
Payments under revolving loan, net - (24,664)
Payments under invoice discounting
facility, net
- (4,458)
Principal payments on long-term debt
- (23,678)
Proceeds from sale of interest rate
swap agreements - 617
------------ ------------
Net cash used in financing
activities
- (52,183)
=----------- ------------
Effect of exchange rate on cash
(2,834) (504)
=----------- ------------
Increase in cash
9,074 5,958
Cash and cash equivalents, beginning
of
year 26,199 20,241
------------ ------------
Cash
and cash equivalents, end of
year
$ 35,273 $ 26,199
============ ============
Supplemental cash flow information:
Cash
paid for interest $ 405 $ 1,143
============ ============
Cash
paid for income taxes, net $ 1,102 $ 4,872
============ ============
ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per
share data)
September
30, September 30,
2009
2008
------------
=-----------
ASSETS
(Audited)
Current assets:
Cash and cash equivalents
$ 35,273 $ 26,199
Restricted Cash
- 136
Accounts receivable, less allowance for
doubtful accounts of $839 and $823,
respectively
19,594 17,774
Unbilled accounts receivable
11,572 15,892
Deferred income taxes
389 474
Prepaid expenses and other assets
1,188 1,375
Assets of discontinued operations
- 182
=----------- ------------
Total current assets
68,016 62,032
Property and equipment, net
7,756 8,574
Goodwill
95,649 109,292
Other intangible assets, net
1,646 3,345
Taxes receivable
- 19
------------
=-----------
Total assets $ 173,067 $
183,262
============
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
liabilities:
Accounts payable $ 1,186 $
1,614
Accrued expenses, inclusive of payroll and
related
expenses 24,304 28,244
Taxes
payable 201 -
Liabilities of discontinued operations - 624
------------ ------------
Total current liabilities 25,691
30,482
Deferred income taxes 103
110
------------
=-----------
Total liabilities 25,794
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 241,555 241,018
Accumulated
other comprehensive (loss) income (14,418) 1,819
Accumulated
deficit (78,026) (88,329)
------------ ------------
149,567 154,964
Less cost of
treasury stock (585 shares) (2,294) (2,294)
------------ ------------
Total
shareholders' equity 147,273 152,670
------------ ------------
Total
liabilities and shareholders' equity $ 173,067 $ 183,262
============ ============
ALLIED HEALTHCARE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands,
except per share data)
Three Months
Ended Year Ended September
September
30, September 30,
=------------------- --------------------
2009 2008 2009 2008
=-------- --------- --------- ---------
(Audited)
Total revenues $
69,845 $ 74,968 $ 249,810 $ 298,577
=-------- --------- --------- ---------
Gross profit
21,196 22,911 76,348 90,385
Selling, general and
administrative expenses 17,010 18,570 63,234 77,655
--------- --------- --------- ---------
Operating income 4,186 4,341 13,114 12,730
Interest and other
(expense) income, net (14) 264
427 393
Foreign exchange expense (137) (435)
(197) (586)
--------- ---------
=-------- ---------
Income before income taxes
and
discontinued
operations 4,035 4,170 13,344
12,537
Provision for income taxes 1,098 1,279
3,408 3,751
--------- ---------
=-------- ---------
Income from continuing
operations
2,937 2,891 9,936 8,786
--------- --------- --------- ---------
Discontinued
operations:
Income from discontinued
operations, net of taxes
- - 367 -
=-------- --------- --------- ---------
Net income
$ 2,937 $ 2,891 $ 10,303 $ 8,786
========= ========= ========= =========
Basic income per share
of
common stock from:
Income from continuing
operations
$ 0.07 $ 0.06 $ 0.22 $ 0.20
Income from
discontinued
operations - - 0.01
-
--------- --------- ---------
=--------
Net income $ 0.07 $ 0.06 $ 0.23 $
0.20
========= ========= =========
=========
Diluted income per share of
common stock from:
Income from continuing
operations $ 0.07 $ 0.06
$ 0.22 $ 0.19
Income from discontinued
operations
- - 0.01 -
--------- --------- --------- ---------
Net income
$ 0.07 $ 0.06 $ 0.23 $ 0.19
========= ========= ========= =========
Weighted average number
of
common shares outstanding:
Basic 44,986
44,986 44,986 44,986
=========
========= ========= =========
Diluted 45,074
45,086 45,011 45,078
=========
========= ========= =========
Allied Healthcare International Inc.
Sandy Young
Chief Executive Officer
Paul Weston
Chief Financial Officer
UK 00-44-1785 810-600
sandyyoung@alliedhealthcare.com
paulweston@alliedhealthcare.com
or
The Investor Relations Group
Adam Holdsworth
212-825-3210
or
Cenkos Securities plc (Nominated Advisor)
Elizabeth Bowman
London: 00-44-20-7397-8928
or
Ian Soanes
London: 00-44-20-7397-8924
This information is provided by RNS
The company news service from the London Stock Exchange
END
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