Allied Healthcare International Inc. Reports Fiscal 2006 Fourth
                          Quarter and Year-End Results


     NEW YORK--Dec. 14, 2006--Allied Healthcare International Inc. (Nasdaq:
AHCI; AIM: AHI):


                   Fourth Quarter            Twelve Months
Revenue            $74.5                     $294.6
Gross Profit       $22.2*                    $89.6*
Gross Margin %     29.8%*                    30.4%*
Adjusted EPS       $0.01*                    $0.17*
EPS                (2.92)                    (2.75)


    *Results exclude exceptional charges related to impairment charges for
goodwill and long-lived assets.

     --   4Q 2006 diluted earnings per share excluding impairment charges of
          $0.01, versus $0.13, before charges, in 4Q 2005

     --   FY 2006 diluted earnings per share excluding impairment charges of
          $0.17, versus $0.45, before charges, in 2005

     --   Impairment charges in 4Q 2006 and FY 2006 total $131.4 million after
          tax

     --   FY 2006 gross margins improved year over year to 30.4% from 29.5%

     Allied Healthcare International Inc. (Nasdaq: AHCI; AIM: AHI), a leading
provider of flexible healthcare staffing services in the United Kingdom, has
announced the financial results of its fiscal 2006 fourth quarter and year-end.

     For the fiscal year ended September 30, 2006, the Company generated
revenues of $294.6 million, compared with $351.2 million reported in 2005. The
$56.6 million decline was mainly due to a reduction in NHS business, which was
again driven by a decrease in expenditures and the NHS's downward price pressure
on the cost of agency nurses. Revenues were also impacted by the unfavorable
effect of changes in foreign exchange of $8.0 million. Net income for the year,
before impairment charges, totaled $7.7 million, or $0.17 per diluted share,
compared with net income, before charges, of $20.2 million, or $0.45 per diluted
share for the comparable period last year. With the addition of impairment
charges, which reduced 2006 results by $131.4 million, or $2.92 per diluted
share, the Company reported a net loss of $123.8 million, or $2.75 per diluted
share, compared with earnings after charges in 2005 of $18.7 million, or $0.41
per diluted share.

     The Company's 2006 fourth quarter and year-end results were negatively
impacted by a total of $131.4 million of impairment charges, net of taxes,
resulting from charges for goodwill and long-lived assets of $120.1 million and
$11.3 million, respectively, which were determined after the company completed
its annual impairment testing in the fourth quarter. The long-lived asset
impairment charge represents $4.3 million for cylinders, redundant plant and
software related to the transfer of the Company's historical oxygen


                                       1
distribution business, $6.3 million associated with the decision to discontinue the implementation of the Oracle front-office operating system, and $0.7 million related to impairment of other intangibles. Gross profit margins for the year, as adjusted, remained strong and increased to 30.4%, compared with 29.5% reported in 2005. The increase in gross margin resulted from the Company's continued emphasis on its higher-margin, Social= Services business, and a decreased emphasis on its lower-margin, NHS business. The Company's reported gross profit mix for the year, as adjusted, is as follows: 65% Social Services, 16% Nursing homes, 14% NHS, and 5% Oxygen. For the fourth quarter ended September 30, 2006, the Company generated revenue of $74.5 million, compared with $84.3 million reported for the comparable quarter last year. Net income for the quarter, before impairment charges, reached $0.3 million, or $0.01 per diluted share, compared with net income before charges of $5.7 million, or $0.13 per diluted share for the comparable period in 2005. Net loss in the fourth quarter, after impairment charges, was $131.1 million, or $2.92 per diluted share, compared with net income after charges of $4.2 million, or $0.09 per diluted share for the fourth quarter of 2005. Gross profit margins for the fourth quarter, as adjusted, remained strong at 29.8%, absorbing the full impact of the lower respiratory margins, compared to 30.9% reported for the comparable quarter last year. The strong gross margin resulted from the Company's continued emphasis on its higher-margin, Social Services business, and a decreased emphasis on its lower-margin, NHS business. The Company's reported gross profit mix for the fourth quarter, as adjusted, is as follows: 69% Social Services, 15% Nursing Homes, 11% NHS, and 5% Oxygen. The Company reported selling, general and administration (SG&A) costs for the year of $75.6 million, compared with $74.0 million last year. The increase was a result of significant investments in its Allied Respiratory division where patient numbers more than doubled from that which was originally anticipated, and the Company is now servicing over 12,500 individuals. As a result, the Company had a disproportionate increase in SG&A expenses of $3.6 million, and anticipates costs relative to the oxygen business to significantly decrease going forward. Additional costs were also related to increased levels of IT depreciation and maintenance costs of $2.7 million, and stock based compensation costs of $0.7 million. These costs were partially offset by savings in the Company's flexible staffing division of $3.6 million, and the effects of foreign exchange. The Company reported selling, general and administration (SG&A) costs for the fourth quarter of $20.7 million, compared with $20.4 million last year. Similarly, the increase was a result of costs associated with the investment in the respiratory business, and an increased level of IT depreciation and maintenance costs associated with the implementation of the Oracle accounting and payroll systems. The Company will maintain its emphasis on growing the Social Services business and is poised to continue to deliver services at home. "The positive results in our core social services business were obscured by the contraction in the nursing market and the investment in the Oxygen business," said Timothy Aitken, Chairman and Chief Executive Officer. "Despite these challenges, the Company successfully transitioned the flexible staffing business to homecare services and the emerging complex care market, which is the foundation for our future growth." Mr. Aitken concluded: "During 2006, management focused on improving the operating structure of the Company, rationalizing the branch network and reducing costs relative to the NHS business. In 2007, the Company is poised to leverage our branch network to deliver Community Care in partnership with Local Government and achieve improved operating results." Allied Healthcare invites all those interested in hearing management's discussion of the results to join the call by dialing 877-407-9205 for domestic participants and 201-689-8054 for international participants at 10:00 AM EST on Thursday, December 14, 2006. 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, and entering account number 286 and conference ID number 223788 when prompted. Participants may also access a live Webcast of the conference call 2 through the "Investors" section of Allied Healthcare's Website, www.alliedhealthcare.com. The presentation will be available and archived for 90 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 charges that are unusual. 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. Management also uses these non-GAAP measures internally to assess the performance of its business and to establish operational goals. 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 attached to this press release. ABOUT ALLIED HEALTHCARE INTERNATIONAL INC. Allied Healthcare International Inc. (http://www.alliedhealthcare.comis a leading provider of flexible healthcare staffing services in the United Kingdom. Allied operates a community-based network of approximately 100 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 Homes and Hospitals. The Company also supplies medical-grade oxygen in the form of cylinders and concentrators to patients in the U.K. 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: Allied's ability to continue to recruit and retain qualified flexible healthcare staff; ability to enter into contracts with hospitals and other healthcare facility customers on terms attractive to Allied; our ability to meet the performance criteria of our respiratory therapy contract; the general level of patient occupancy at hospital and healthcare facilities of Allied's customers; dependence on the proper functioning of Allied's information systems; the effect of existing or future government regulation of the healthcare industry, and 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 revenue and profitability; the ability to use net operating loss carry forwards to offset net income; the effect of the 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. 3 ALLIED HEALTHCARE INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Year Ended September 30, September 30, ------------------- -------------------- 2006 2005 2006 2005 ---------- -------- ---------- --------- Total revenues $ 74,484 $84,328 $ 294,607 $351,189 ---------- -------- ---------- --------- Gross profit 16,241 26,046 83,679 103,671 Selling, general and administrative expenses 20,660 20,439 75,552 73,948 Impairment of goodwill 121,901 - 121,901 - Impairment of long lived assets 10,295 - 10,295 - ---------- -------- ---------- --------- Operating (loss) income (136,615) 5,607 (124,069) 29,723 Interest and other expense, net 1,285 914 4,106 4,164 Foreign exchange (income) loss (11) 19 (73) 98 ---------- -------- ---------- --------- (Loss) income before income taxes (137,889) 4,674 (128,102) 25,461 (Benefit from) provision for income taxes (6,793) 474 (4,331) 6,725 ---------- -------- ---------- --------- Net (loss) income $(131,096) $ 4,200 $(123,771) $ 18,736 ========== ======== ========== ========= Basic (loss) income per share of common stock $ (2.92) $ 0.09 $ (2.75) $ 0.42 ========= ======= ========= ======== Diluted (loss) income per share of common stock $ (2.92) $ 0.09 $ (2.75) $ 0.41 ========= ======= ========= ======== Weighted average number of common shares outstanding: Basic 44,957 44,848 44,930 44,684 ========== ======== ========== ========= Diluted 44,957 45,236 44,930 45,169 ========== ======== ========== ========= Reconciliation of Reported Net (Loss) Income to Adjusted Net Income: Three Months Ended Year Ended September 30, September 30, ------------------- -------------------- 2006 2005 2006 2005 ---------- -------- ---------- --------- Reported net income (loss) $(131,096) $ 4,200 $(123,771) $ 18,736 Impairment of goodwill 120,063 - 120,063 - Impairment of long-lived assets (COGS & SG&A) 11,358 - 11,358 - Rebranding and new corporate logo - 712 - 712 Reorganization of subsidiaries - 751 - 751 --------- ------- --------- -------- Adjusted net income available to common shareholders $ 325 $ 5,663 $ 7,650 $ 20,199 ========= ======= ========= ======== 4 Reconciliation of Reported Net (Loss) Income Per Diluted Share to Adjusted Net Income Per Diluted Share: Three Months Ended Year Ended September 30, September 30, ------------------- -------------------- 2006 2005 2006 2005 ---------- -------- ---------- --------- Reported net (loss) income per diluted share $ (2.92) $ 0.09 $ (2.75) $ 0.41 Add back per-share effect: Impairment of goodwill 2.68 - 2.67 - Impairment of long-lived assets (COGS & SG&A) 0.25 - 0.25 - Rebranding and new corporate logo - 0.02 - 0.02 Reorganization of subsidiaries - 0.02 - 0.02 --------- ------- --------- -------- Adjusted net income per diluted share $ 0.01 $ 0.13 $ 0.17 $ 0.45 ========= ======= ========= ======== CONTACT: Allied Healthcare International Inc. David Moffatt, Chief Financial Officer London: 20 7838 9922 davidmoffatt@alliedhealthcare.com or Investors: The Investor Relations Group Adam Holdsworth/Kevin Murphy 212-825-3210 aholdsworth@investorrelationsgroup.com 5

The following information was filed by Allied Healthcare International Inc (AHCI) on Thursday, December 14, 2006 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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