Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Sep. 30, 2014 | Nov. 04, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Registrant Name | 'ALLIED HEALTHCARE PRODUCTS INC | ' |
Entity Common Stock, Shares Outstanding | ' | 8,027,147 |
Trading Symbol | 'AHPI | ' |
Entity Central Index Key | '0000874710 | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
STATEMENT_OF_OPERATIONS
STATEMENT OF OPERATIONS (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Net sales | $8,845,267 | $8,708,297 |
Cost of sales | 7,270,484 | 6,947,731 |
Gross profit | 1,574,783 | 1,760,566 |
Selling, general and administrative expenses | 2,272,288 | 2,622,202 |
Loss from operations | -697,505 | -861,636 |
Other (income) expenses: | ' | ' |
Interest income | -755 | -1,890 |
Other, net | 11,425 | 8,723 |
Nonoperating income (expense) | 10,670 | 6,833 |
Loss before benefit from income taxes | -708,175 | -868,469 |
Benefit from income taxes | 0 | -277,910 |
Net loss | ($708,175) | ($590,559) |
Basic and diluted loss per share (in dollars per share) | ($0.09) | ($0.07) |
Weighted average shares outstanding - basic and diluted (in shares) | 8,027,147 | 8,027,147 |
BALANCE_SHEET
BALANCE SHEET (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Current assets: | ' | ' |
Cash and cash equivalents | $1,724,227 | $1,366,762 |
Accounts receivable, net of allowances of $170,000 | 3,567,469 | 3,713,105 |
Inventories, net | 9,567,714 | 9,406,098 |
Income tax receivable | 27,791 | 17,166 |
Other current assets | 479,764 | 410,098 |
Total current assets | 15,366,965 | 14,913,229 |
Property, plant and equipment, net | 8,663,959 | 8,935,601 |
Deferred income taxes | 1,996,434 | 1,996,434 |
Other assets, net | 173,275 | 187,163 |
Total assets | 26,200,633 | 26,032,427 |
Current liabilities: | ' | ' |
Accounts payable | 1,537,753 | 1,068,222 |
Other accrued liabilities | 2,029,443 | 1,624,186 |
Deferred income taxes | 830,946 | 830,946 |
Total current liabilities | 4,398,142 | 3,523,354 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock; $0.01 par value; 1,500,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock; $0.01 par value; 30,000,000 shares authorized; 10,427,878 shares issued at September 30, 2014 and June 30, 2014; 8,027,147 shares outstanding at September 30, 2014 and June 30, 2014 | 104,279 | 104,279 |
Additional paid-in capital | 48,586,829 | 48,585,236 |
Accumulated deficit | -5,907,829 | -5,199,654 |
Less treasury stock, at cost; 2,400,731 shares at September 30, 2014 and June 30, 2014 | -20,980,788 | -20,980,788 |
Total stockholders' equity | 21,802,491 | 22,509,073 |
Total liabilities and stockholders' equity | 26,200,633 | 26,032,427 |
Series A Preferred Stock [Member] | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock; $0.01 par value; 1,500,000 shares authorized; no shares issued and outstanding | $0 | $0 |
BALANCE_SHEET_Parenthetical
BALANCE SHEET [Parenthetical] (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Allowances for accounts receivable (in dollars) | $170,000 | $170,000 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 10,427,878 | 10,427,878 |
Common stock, shares outstanding | 8,027,147 | 8,027,147 |
Treasury stock, at cost | 2,400,731 | 2,400,731 |
Series A Preferred Stock [Member] | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 200,000 | 200,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
STATEMENT_OF_CASH_FLOWS
STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($708,175) | ($590,559) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 334,693 | 304,975 |
Stock based compensation | 1,593 | 4,955 |
Provision for doubtful accounts and sales returns and allowances | 13,248 | -1,399 |
Deferred taxes | 0 | -277,910 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 132,388 | 597,587 |
Inventories | -161,616 | -907,349 |
Income tax receivable | -10,625 | -11,754 |
Other current assets | -69,666 | -185,968 |
Accounts payable | 469,531 | 378,462 |
Other accrued liabilities | 405,257 | 265,715 |
Net cash provided by (used in) operating activities | 406,628 | -423,245 |
Cash flows from investing activities: | ' | ' |
Capital expenditures | -49,163 | -187,542 |
Net cash used in investing activities | -49,163 | -187,542 |
Net increase (decrease) in cash and cash equivalents | 357,465 | -610,787 |
Cash and cash equivalents at beginning of period | 1,366,762 | 3,687,919 |
Cash and cash equivalents at end of period | $1,724,227 | $3,077,132 |
Summary_of_Significant_Account
Summary of Significant Accounting and Reporting Policies | 3 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Significant Accounting Policies [Text Block] | ' |
1. Summary of Significant Accounting and Reporting Policies | |
Basis of Presentation | |
The accompanying unaudited financial statements of Allied Healthcare Products, Inc. (the “Company”) have been prepared in accordance with the instructions for Form 10-Q and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes to the financial statements thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014. | |
Recently Issued Accounting Guidance | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, we will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and we are currently evaluating which transition approach to use and the full impact this ASU will have on our future financial statements. | |
The FASB has issued Accounting Standards Update (ASU) No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 establishes the responsibility of management to assess an organization’s ability to continue as a going concern and to provide related footnote disclosures. The ASU is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. We do not expect the adoption of this ASU to have an impact on our future financial statements. | |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts for cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short maturity of these instruments. | |
Inventories
Inventories | 3 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Inventory Disclosure [Text Block] | ' | |||||||
2. Inventories | ||||||||
Inventories are comprised as follows: | ||||||||
September 30, 2014 | June 30, 2014 | |||||||
Work-in progress | $ | 667,632 | $ | 616,474 | ||||
Component parts | 7,664,250 | 7,605,543 | ||||||
Finished goods | 2,664,707 | 2,617,799 | ||||||
Reserve for obsolete and excess | ||||||||
inventories | -1,428,875 | -1,433,718 | ||||||
$ | 9,567,714 | $ | 9,406,098 | |||||
Earnings_per_share
Earnings per share | 3 Months Ended |
Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ' |
Earnings Per Share [Text Block] | ' |
3. Earnings per share | |
Basic earnings per share are based on the weighted average number of shares of all common stock outstanding during the period. Diluted earnings per share are based on the sum of the weighted average number of shares of common stock and common stock equivalents outstanding during the period. The number of basic and diluted shares outstanding for the three months ended September 30, 2014 and 2013 were 8,027,147. | |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
4. Commitments and Contingencies | |
Legal Claims | |
The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. The Company intends to continue to conduct business in such a manner as to avoid FDA actions seeking to interrupt or suspend manufacturing or require any recall or modification of products. | |
The Company has recognized the costs and associated liabilities only for those investigations, claims and legal proceedings for which, in its view, it is probable that liabilities have been incurred and the related amounts are estimable. Based upon information currently available, management believes that existing accrued liabilities are sufficient and that it is not reasonably possible at this time that any additional liabilities will result from the resolution of these matters that would have a material adverse effect on the Company’s results of operations, financial position, or cash flows. | |
Stuyvesant Falls Power Litigation. The Company is currently involved in litigation with Niagara Mohawk Power Corporation d/b/a National Grid (“Niagara”) and other parties, which provides electrical power to the Company’s facility in Stuyvesant Falls, New York. In fiscal year 2011, Niagara began sending invoices to the Company for electricity used at the Company’s Stuyvesant Falls plant. The Company maintains in its defense of the lawsuit that it is entitled to a certain amount of free electricity based on covenants running with the land which have been honored for more than a century. Niagara’s attempts to collect such invoices were stopped in December 2010 by a temporary restraining order. Among other things, Niagara seeks as damages the value of electricity received by the Company without charge. While the total value of electricity at issue in the litigation is not known with certainty, Niagara alleges in its Motion for Summary Judgment, filed on March 14, 2014, damages of approximately $492,000 in free electricity since May 2010. Alternatively, Niagara asserts that, in the event that the free power covenant is still enforceable, the Company is still responsible for delivery fees relating to any free power to which it is entitled. The Company filed its own Motion for Summary Judgment on March 14, 2014, seeking dismissal of Niagara’s claims; and oral arguments on the motions were held on June 13, 2014. On October 1, 2014, the Court granted the Company’s motion, denied Niagara’s motion and ruled that the Company is entitled to receive electrical power pursuant to the power covenants. As of September 30, 2014, the Company has not recorded a provision for this matter as management intends to defend against any further litigation and to enforce its rights under the subject power covenants. | |
Dräger Patent Litigation. On or about October 4, 2013, Dräger Medical GmbH and certain affiliates (the “Dräger Plaintiffs”) filed a patent infringement lawsuit against the Company in the United States District Court for the District of Delaware, asserting that the Company infringes United States Patent Nos. 7,487,776 and 8,286,633, both protecting particular combinations of carbon dioxide absorption cartridges and adapters which fit on anesthesia machines. The Dräger Plaintiffs assert that the Company’s sales of certain models of its Litholyme and Carbolime single-use carbon dioxide absorption cartridges infringe both patents. The Company answered the Complaint, asserting invalidity of the patents, non-infringement, and implied license under the doctrine of permissive repair. | |
On October 25, 2013, the Dräger Plaintiffs filed a motion for preliminary injunction requesting that the Company be enjoined from selling certain models of its Litholyme and Carbolime cartridges during the pendency of the litigation. A hearing on the motion for preliminary injunction was held on February 7, 2014. On March 24, 2014, the Court ruled in the Company’s favor and denied Dräger’s motion for a preliminary injunction, stating among other things that Dräger had not carried its burden of showing that the Company had infringed Dräger’s patents. On June 20, 2014, the Company filed a motion seeking summary judgment based on the repair doctrine, which was the basis for the Court’s denial of Dräger’s motion for preliminary injunction. The Company’s motion and Dräger’s response is currently under submission to the Court. | |
As of September 30, 2014, the Company has not recorded a provision for this matter because the Company cannot estimate a possible loss or range of loss for this matter because the Dräger Plaintiffs have not specified damages claimed and the proceedings are in the early stages. The Company intends to defend against any further litigation brought by the Dräger Plaintiffs and pursue counterclaims for invalidity, non-infringement, and implied license. | |
Employment Contract | |
The Company has entered into an employment contract with its chief executive officer with annual renewals. The contract includes termination without cause and change of control provisions, under which the chief executive officer is entitled to receive specified severance payments generally equal to two times ending annual salary if the Company terminates his employment without cause or he voluntarily terminates his employment with “good reason.” “Good Reason” generally includes changes in the scope of his duties or location of employment but also includes (i) the Company’s written election not to renew the Employment Agreement and (ii) certain voluntary resignations by the chief executive officer following a “Change of Control” as defined in the Agreement. | |
Financing
Financing | 3 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Debt Disclosure [Text Block] | ' |
5. Financing | |
The Company is party to a Loan and Security Agreement, dated November 17, 2009, with Enterprise Bank & Trust (the “Credit Agreement”) pursuant to which the Company obtained a secured revolving credit facility. Currently, the agreement provides for borrowing availability of up to $5,000,000 (the “Credit Facility”). At September 30, 2014, the Company had $5,000,000 available for borrowing on the line of credit. The Company’s obligations under the Credit Facility are secured by certain assets of the Company pursuant to the terms and subject to the conditions set forth in the Credit Agreement. | |
The Credit Facility was amended on November 10, 2014 extending the maturity date to November 9, 2015. The Credit Facility will be available on a revolving basis until it expires on November 9, 2015, at which time all amounts outstanding under the Credit Facility will be due and payable. Advances under the Credit Facility will be made pursuant to a Revolving Credit Note (as defined in the Credit Agreement) executed by the Company in favor of Enterprise Bank & Trust. Such advances will bear interest at a rate equal to 3.50% in excess of the 30-day LIBOR rate. Advances may be prepaid in whole or in part without premium or penalty. | |
Under the Credit Agreement, advances are generally subject to customary borrowing conditions. The Credit Agreement also contains covenants with which the Company must comply during the term of the Credit Facility. Among other things, such covenants restrict the Company’s ability to incur certain additional debt; make specified restricted payments, dividends and capital expenditures; authorize or issue capital stock; enter into certain transactions with affiliates; consolidate or merge with or acquire another business; sell certain of its assets or dissolve or wind up the Company. The Credit Agreement also contains certain events of default that are customary for financings of this type including, without limitation: the failure to pay principal, interest, fees or other amounts when due; the breach of specified representations or warranties contained in the loan documents; cross-default with certain other indebtedness of the Company; the entry of uninsured judgments that are not bonded or stayed; failure to comply with the observance or performance of specified agreements contained in the loan documents; commencement of bankruptcy or other insolvency proceedings; and the failure of any of the loan documents entered into in connection with the Credit Facility to be in full force and effect. After an event of default, and upon the continuation thereof, the principal amount of all loans made under the Credit Facility would bear interest at a rate per annum equal to 4.00% above the otherwise applicable interest rate (provided, that the interest rate may not exceed the highest rate permissible under law), and the lender would have the option to accelerate maturity and payment of the Company’s obligations under the Credit Facility. | |
The 30-day LIBOR rate was 0.15% on September 30, 2014. | |
At September 30, 2014 the Company had no aggregate indebtedness, including capital lease obligations, short-term debt and long term debt. | |
The Company was in compliance with all of the covenants associated with the Credit Facility at September 30, 2014. | |
Income_Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure [Text Block] | ' |
6. Income Taxes | |
The Company accounts for income taxes under ASC Topic 740: “Income Taxes.” Under ASC 740, the deferred tax provision is determined using the liability method, whereby deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and income tax bases of assets and liabilities using presently enacted tax rates. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In the quarter ended September 30, 2014 the Company recorded the tax benefit of losses incurred during the current quarter in the amount of approximately $266,000. As the realization of the tax benefit of the net operating loss is not assured an additional valuation allowance of approximately $266,000 was also recorded. The total valuation allowance recorded by the Company as of September 30, 2014 was approximately $1,066,000. To the extent that the Company’s losses continue in future quarters, the tax benefit of those losses will be subject to a valuation allowance. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation | |
The accompanying unaudited financial statements of Allied Healthcare Products, Inc. (the “Company”) have been prepared in accordance with the instructions for Form 10-Q and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for any quarter are not necessarily indicative of the results for any other quarter or for the full year. These statements should be read in conjunction with the financial statements and notes to the financial statements thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
Recently Issued Accounting Guidance | |
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers." This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This ASU is effective for annual reporting periods beginning after December 15, 2016 and early adoption is not permitted. Accordingly, we will adopt this ASU on January 1, 2017. Companies may use either a full retrospective or modified retrospective approach to adopt this ASU and we are currently evaluating which transition approach to use and the full impact this ASU will have on our future financial statements. | |
The FASB has issued Accounting Standards Update (ASU) No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” ASU 2014-15 establishes the responsibility of management to assess an organization’s ability to continue as a going concern and to provide related footnote disclosures. The ASU is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. We do not expect the adoption of this ASU to have an impact on our future financial statements. | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' |
Fair Value of Financial Instruments | |
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and accounts payable. The carrying amounts for cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short maturity of these instruments. | |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Inventory, Net [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventories are comprised as follows: | ||||||||
September 30, 2014 | June 30, 2014 | |||||||
Work-in progress | $ | 667,632 | $ | 616,474 | ||||
Component parts | 7,664,250 | 7,605,543 | ||||||
Finished goods | 2,664,707 | 2,617,799 | ||||||
Reserve for obsolete and excess | ||||||||
inventories | -1,428,875 | -1,433,718 | ||||||
$ | 9,567,714 | $ | 9,406,098 | |||||
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Inventory [Line Items] | ' | ' |
Work-in progress | $667,632 | $616,474 |
Component parts | 7,664,250 | 7,605,543 |
Finished goods | 2,664,707 | 2,617,799 |
Reserve for obsolete and excess inventories | -1,428,875 | -1,433,718 |
Inventory, Net | $9,567,714 | $9,406,098 |
Earnings_per_share_Details_Tex
Earnings per share (Details Textual) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Per Share [Line Items] | ' | ' |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 8,027,147 | 8,027,147 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Textual) (USD $) | 47 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies [Line Items] | ' |
Loss Contingency, Damages Sought, Value | $492,000 |
Financing_Details_Textual
Financing (Details Textual) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Nov. 17, 2009 | |
Debt Instrument [Line Items] | ' | ' |
Line Of Credit Facility, Maximum Borrowing Capacity | ' | $5,000,000 |
Line of Credit Facility, Current Borrowing Capacity | $5,000,000 | ' |
Debt Instrument, Maturity Date | 9-Nov-15 | ' |
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum | 3.50% | ' |
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | ' |
Debt Instrument, Basis Spread on Variable Rate | 0.15% | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 3 Months Ended |
Sep. 30, 2014 | |
Schedule Of Income Tax Disclosure [Line Items] | ' |
Deferred Other Tax Expense (Benefit) | $266,000 |
Deferred Tax Assets Valuation Allowance Addition Amount | 266,000 |
Deferred Tax Assets, Valuation Allowance | $1,066,000 |