Allion Healthcare Reports Record Fourth Quarter 2008 Revenues of $97 Million and Fully Diluted EPS of $0.12

Allion Healthcare (NASDAQ: ALLI) today announced financial results for the fourth quarter and year ended December 31, 2008. Results for the periods include the Company’s expansion into the Specialty Infusion market as a result of the April 4, 2008 acquisition of Biomed America, Inc. ("Biomed”). Allion Healthcare now operates its business in two segments: Specialty HIV, which is the Company’s legacy specialty pharmacy and disease management business focused on HIV/AIDS patients, and Specialty Infusion, which is the Company’s recently acquired Biomed business specializing in biopharmaceutical medications and services for chronically ill patients.

Summary of Results

Consolidated net sales increased 52% to $96.9 million for the quarter ended December 31, 2008 when compared to the fourth quarter of 2007. Both business segments achieved better than expected revenue growth with Specialty HIV up 14% to $72.7 million when compared to the fourth quarter of 2007 and Specialty Infusion up sequentially 11% over the third quarter of 2008. For the year, same store Specialty HIV revenues increased 12% to $276.9 million. Total revenues for the year of $340.7 million include $63.7 million from the Biomed acquisition completed in April 2008.

Adjusted EBITDA more than tripled to $7.6 million in the fourth quarter of 2008, compared to $2.2 million during the fourth quarter of 2007. The increase in Adjusted EBITDA reflects the contribution from the Biomed acquisition and improved leverage in selling, general and administrative expenses resulting from the strong organic growth of the Company’s Specialty HIV business. For the year, same store growth in Specialty HIV and the addition of Specialty Infusion as of April 4, 2008 increased Adjusted EBITDA by almost 300% to $25.3 million. An explanation and reconciliation of Net income under GAAP to EBITDA and Adjusted EBITDA is provided below.

Net income for the fourth quarter of 2008 increased to $3.1 million, which compares to $1.1 million for the same period last year. Earnings per diluted share for the fourth quarter of 2008 were $0.12 compared to earnings per diluted share of $0.06 for the fourth quarter of 2007.

"We are pleased to report solid fourth quarter and full year operating results across both of our business segments,” remarked Michael Moran, Chairman, President and Chief Executive Officer of Allion Healthcare. "The quarter was highlighted by the continued strong organic growth in Specialty HIV. Same store Specialty HIV growth of 14% in the fourth quarter and 12% for the year, together with an expansion in our Specialty HIV operating margins, validates both our strategic focus and operating effectiveness as we execute our low cost business model over a broader patient population.”

With respect to the Company’s fourth quarter performance of the Specialty Infusion business, Mr. Moran went on to say, "We continue to be more than pleased with the Biomed’s performance and look forward to their continued growth.”

Mr. Moran concluded, "We are very proud of the performance of our clinical and operational teams during these challenging times. Their unwavering commitment to our business model and to the patient and physician communities we serve positions us well for the opportunities and challenges we face in 2009.”

Guidance

The Company today provided financial guidance for the full year 2009. This guidance includes the Company’s estimate of a proposed 1% and 5% Medi-Cal rate reduction recently announced by the State of California and the dilutive effect related to the Biomed earn out. The guidance also assumes a 42% effective tax rate.

Conference Call Information

The conference call to discuss the results will be held at 5:00 p.m. ET on Wednesday, March 4, 2009. To access the call, please dial (888) 279–0822. International participants may dial (706) 902-0355. The conference call will also be webcast on Allion Healthcare’s website at www.allionhealthcare.com. To join the webcast, please go to Allion Healthcare’s web site at least 15 minutes prior to the start of the conference call to register, download, and install any necessary audio software.

An audio replay of the conference call will be available from 8:00 p.m. ET on Wednesday, March 4, 2009, through 11:59 p.m. ET on Wednesday, March 18, 2009 by dialing (800) 642-1687 from the U.S. or (706) 645-9291 from abroad and entering confirmation code 86471829. The audio webcast will also be available on the Company's website at www.allionhealthcare.com for one year.

Questions during the live call will be taken from investment professionals only.

About Allion Healthcare

Allion Healthcare, Inc. is a national provider of specialty pharmacy and disease management services focused on HIV/AIDS patients as well as specialized biopharmaceutical medications and services to chronically ill patients. Allion Healthcare sells HIV/AIDS medications, ancillary drugs and nutritional supplies under the trade name MOMS Pharmacy. Allion Healthcare provides services for the intravenous immunoglobulin, Blood Clotting Factor and other therapies through its Biomed Healthcare division. Allion Healthcare works closely with physicians, nurses, clinics, AIDS Service Organizations, and with government and private payors to improve clinical outcomes and reduce treatment costs.

Safe Harbor Statement

This press release contains certain "forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company’s growth strategy, future effective tax rate, the impact of the Medi-Cal rate reductions, and future financial performance. Words such as "continue," "will," "assume," and similar expressions identify forward-looking statements. Such forward-looking statements represent Allion Healthcare’s expectations and beliefs and involve a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, successful integration of the Biomed acquisition, competitive pressures, demand for Allion Healthcare’s products and services, declining general economic conditions and restrictions in the credit market, changes in third party reimbursement rates or Allion Healthcare’s qualification for preferred reimbursement rates in California and New York, changes in government regulations or the interpretation of these regulations, Allion Healthcare’s ability to manage growth successfully, Allion Healthcare’s ability to effectively market its services, receipt of licensing and regulatory approvals, successful identification of strategic alliances and satellite facilities, and other risks set forth in Item 1A. Risk Factors in Allion Healthcare’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008. You are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Except to the extent required by applicable securities laws, Allion Healthcare undertakes no obligation to update any forward-looking statement contained herein, whether as a result of new information, future events, or otherwise.