ALLIED HEALTHCARE INTERNATIONAL INC

CIK:0000890634|SEC Filings

Earnings Per Share

9 Months Ended

Jun. 30, 2011

Earnings Per Share:

Basic earnings per share (“EPS”) is computed using the weighted average number of common _shares outstanding. Diluted EPS adjusts basic EPS for the effects of stock options and warrants only when such effect is dilutive. The Company uses the treasury stock method to calculate the effect of potential common shares, which require it to compute total assumed proceeds as the sum of (a) the amount the employee must pay upon exercise of the award, (b) the amount of unrecognized share-based compensation costs attributed to future services and (c) the amount of tax benefits, if any, that would be credited to additional paid-in capital assuming exercise of the award. Share-based compensation awards for which total assumed proceeds exceed the average market price over the applicable period have an antidilutive effect on EPS and are excluded from the calculation of diluted EPS. At June 30, 2011 and 2010, the Company had outstanding stock options (including performance-based stock options) to purchase 1.4 million and 2.3 million shares, respectively, of common stock ranging in price from $2.11 to $6.20 and $2.11 to $6.20 per share, respectively, that were not included in the computation of diluted EPS either because the exercise price was greater than the average market price of the common shares or the conditions of the performance-based stock options have yet to be satisfied or such effect would have been anti-dilutive. Further, 0.6 million of contingently issuable shares related to the SARs issued to the CEO, as further described in Note 2, have not been included in the computation of diluted EPS at June 30, 2011 and 2010.

The weighted average number of shares used in the basic and diluted earnings per share computations for the three and nine months ended June 30, 2011 and 2010 are as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Weighted average number of common shares outstanding as used in computation of basic EPS of common stock		43,571		45,045		43,571		45,102
Effect of dilutive securities — stock options		266		224		272		261

Shares used in computation of diluted EPS of common stock		43,837		45,269		43,843		45,363

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	9 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 6,449	$ 7,213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,875	2,242
Amortization of intangible assets	778	952
Foreign exchange gain	(6)	(2)
Increase (decrease) in provision for allowance for doubtful accounts	184	(24)
Loss (gain) on sale of fixed assets	19	(2)
Stock based compensation	401	471
Deferred income taxes	49	102
Changes in operating assets and liabilities, excluding the effect of businesses acquired and sold:
Increase in accounts receivable	(863)	(335)
Decrease in prepaid expenses and other assets	909	671
(Decrease) increase in accounts payable and other liabilities	(1,936)	1,693
Net cash provided by operating activities	8,859	12,981
Cash flows from investing activities:
Capital expenditures	(3,172)	(2,428)
Acquisition of controlling interest, net of cash acquired	(60)	(5,812)
Payments for acquisitions - net of cash acquired	(2,626)
Proceeds from sale of property and equipment	8	62
Net cash used in investing activities	(5,850)	(8,178)
Cash flows from financing activities:
Repayments of debt and capital lease obligations	(2,661)	(121)
Borrowings under invoice discounting facility, net	117	248
Treasury shares acquired		(1,317)
Stock options exercised		288
Net cash used in financing activities	(2,544)	(902)
Effect of exchange rate on cash	594	(2,220)
Increase in cash	1,059	1,681
Cash and cash equivalents, beginning of year	39,031	35,273
Cash and cash equivalents, end of period	40,090	36,954
Supplemental cash flow information:
Cash paid for interest	64	10
Cash paid for income taxes, net	3,332	1,025
Supplemental disclosure of non-cash investing and financing activities:
Capital expenditures included in accrued expenses and other long-term liabilities	312	609
Details of business acquired in purchase transactions:
Fair value of assets acquired	7,921	12,430
Liabilities assumed or incurred	3,635	2,694
Noncontrolling interest		3,888
Cash paid for acquisitions	3,368	5,848
Cash acquired	682	36
Net cash paid for acquisitions	2,686	5,812
Deferred acquisition payment	$ 918

Condensed Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Sep. 30, 2010
Current assets:
Cash and cash equivalents	$ 40,090	$ 39,031
Accounts receivable, less allowance for doubtful accounts of $870 and $732, respectively	22,387	20,092
Unbilled accounts receivable	12,575	13,393
Deferred income taxes	509	552
Prepaid expenses and other assets	2,185	1,943
Total current assets	77,746	75,011
Property and equipment, net	9,042	8,924
Goodwill	109,907	102,945
Other intangible assets, net	2,771	3,501
Total assets	199,466	190,381
Current liabilities:
Accounts payable	1,491	1,581
Current maturities of debt and capital leases	682	614
Accrued expenses, inclusive of payroll and related expenses	26,698	25,897
Taxes payable	2,558	2,310
Total current liabilities	31,429	30,402
Long-term debt and capital leases, net of current maturities	172	389
Deferred income taxes	1,410	1,534
Other long-term liabilities	0	308
Total liabilities	33,011	32,633
Commitments and contingencies (Note 10)
Noncontrolling interest (Note 5)	4,902	4,358
Shareholders' equity:
Preferred stock, $.01 par value; authorized 10,000 shares, issued and outstanding - none	0	0
Common stock, $.01 par value; authorized 80,000 shares, issued 45,721 and 45,721 shares, respectively	457	457
Additional paid-in capital	242,879	242,478
Accumulated other comprehensive loss	(13,467)	(15,267)
Accumulated deficit	(62,196)	(68,158)
Subtotal shareholders' equity	167,673	159,510
Less cost of treasury stock (2,150 shares)	(6,120)	(6,120)
Total shareholders' equity	161,553	153,390
Total liabilities and shareholders' equity	$ 199,466	$ 190,381