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Allion Healthcare, Inc.
1660 Walt Whitman Road, Suite 105
Melville, NY 11747
Tel: (631) 547-6520


Allion Healthcare Reports Fourth Quarter Results

MELVILLE, N.Y., March 13, 2008 – Allion Healthcare, Inc. (NASDAQ: ALLI), a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients, today announced financial results for the three months and twelve months ended December 31, 2007.

Fourth Quarter and Full Year 2007 Highlights

 
ü
Net sales for the fourth quarter increased 10% to $63.6 million.

 
ü
Net income for the fourth quarter was $1.1 million, or $0.06 per diluted share, including a $0.05 per share impact of a prior period pre-tax premium reimbursement audit adjustment of $758,000 and pre-tax expenses related to the Oris litigation and the SEC’s informal inquiry of $501,000.

 
ü
Net sales for full year 2007 increased to $246.7 million, up 18%.

 
ü
EBITDA increased to $7.9 million for 2007 compared with $6.5 million for 2006.

 
ü
Cash flow from operations increased 20% to $6.2 million for the full year.

Fourth Quarter 2007 Financial Results

Allion produced 9.8% growth in net sales for the fourth quarter of 2007 to $63.6 million from $57.9 million for the fourth quarter of 2006.  Gross profit for the fourth quarter of 2007 was $9.0 million, or 14.1% of net sales, compared with $8.3 million, or 14.3% of net sales, for the fourth quarter of 2006. The fourth quarter 2007 results included a prior period reduction of $758,000 related to an audit of the California premium reimbursement program back to 2004, which reduced both net sales and gross profit.

Selling, general and administrative expenses declined to $7.6 million, or 12.0% of net sales, for the fourth quarter of 2007 from $8.1 million, or 13.9% of net sales, for the prior-year fourth quarter. Selling, general and administrative expenses included expenses related to the Oris litigation and the SEC’s informal inquiry of $501,000, or 0.8% of revenues for the fourth quarter of 2007 and $368,000, or 0.6% of revenues for the fourth quarter of 2006.

Net income was $1.1 million or $0.06 per diluted share, for the fourth quarter of 2007 compared with $380,000 or $0.02 per diluted share for the fourth quarter of 2006.  Earnings before interest, taxes, depreciation and amortization, (EBITDA), more than doubled to $2.2 million for the fourth quarter of 2007 from $1.1 million for the fourth quarter of 2006.  Excluding the retroactive premium reimbursement and expenses related to the Oris litigation and the SEC’s informal inquiry, Adjusted EBITDA would have been $3.5 million for the fourth quarter of 2007 as compared to $1.9 million for the fourth quarter of 2006.  An explanation and reconciliation of net income under generally accepted accounting principles (GAAP) to EBITDA and Adjusted EBITDA is provided below.

“Allion produced strong results for the fourth quarter of 2007,” remarked Michael Moran, Allion’s Chairman, President and Chief Executive Officer.  “We achieved our goal of double-digit organic sales growth for the quarter, with an improved gross margin on these sales and a decline in SG&A expenses both in dollars and as a percentage of net sales.  We also completed 2007 with a stronger financial position, having produced cash flow from operations of $6.2 million for the full year.  Cash and cash equivalents and short-term investments totaled $28.8 million at the end of 2007, total stockholders’ equity was $106.2 million and we remained debt free.  As a result, we are well positioned to continue implementing our growth strategies during 2008.”

Guidance

The Company today provided financial guidance for the first quarter of 2008.  This guidance assumes a 38% tax rate and does not include any future acquisitions.

   
Three Months Ending
March 31, 2008
(Guidance)
 
Net sales (millions)
  $ 64.0 – 65.0  
Earnings per diluted share
  $ 0.04 – 0.06  
         
Operating Data

The following table sets forth the net sales and operating data for each of Allion’s distribution regions for the three months ended December 31, 2007 and 2006 (dollars in thousands):
 
   
Three Months Ended December 31,
 
   
2007
   
2006
 
Distribution Region
 
Net Sales
   
Prescriptions
   
Patient Months (1)
   
Net Sales
   
Prescriptions
   
Patient Months (1)
 
California (2)
  $ 41,589       171,830       35,518     $ 37,106       158,747       33,369  
New York
  $ 20,345       76,139       11,154     $ 19,109       74,656       11,372  
Seattle
  $ 1,141       5,613       971     $ 1,054       5,222       936  
Florida
  $ 511       2,364       323     $ 628       2,867       432  
Total
  $ 63,586       255,946       47,966     $ 57,897       241,492       46,109  

(1)
Patient months represent a count of the number of months during a period that a patient received at least one prescription. If an individual patient received multiple medications during each month for a quarterly period, a count of three would be included in patient months irrespective of the number of prescriptions filled each month.

(2)
California operations for the 3 months ended December 31, 2007 includes a reduction of $758 of premium reimbursement overpayment for prior periods in 2004, 2005, 2006 and 2007.  In the second quarter of 2007, we identified an error in the reporting of Gardena prescriptions and corrected the previously reported number of prescriptions of 160,448 in California for the 3-month period ended December 31, 2006.

- MORE -
 
 

The following information was filed by Allion Healthcare Inc on Thursday, March 13, 2008 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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