For Further Information, Contact:
John J. Millerick
Senior Vice President & CFO
(978) 326-4000
Paul M. Roberts
Director of Communications
(978) 326-4213
proberts@analogic.com
Analogic Corporation Announces Results for Its Second Quarter
PEABODY, MA (March 6, 2008) – Analogic Corporation (NASDAQ: ALOG), a leading designer and manufacturer of high-precision health and security imaging equipment, today announced results for its second quarter ended January 31, 2008.
Highlights of the quarter and recent events include:
Revenues for the second quarter ended January 31, 2008, were $99,400,000, compared with the prior year’s second quarter revenues of $88,358,000, an increase of $11,042,000, or 12%. On a GAAP basis, net income for the second quarter was $7,147,000, or $0.54 per diluted share, compared with a net income of $5,420,000, or $0.39 per diluted share, for the prior year’s second quarter.
On a non-GAAP basis, net income for the second quarter ended January 31, 2008, was $7,831,000, or $0.59 per diluted share, compared to a net income of $6,449,000, or $0.46 per diluted share, for the prior year’s second quarter.
Revenues for the six months ended January 31, 2008, were $193,601,000, compared with the prior year’s first six-month revenues of $163,960,000, an increase of $29,641,000, or 18%. On a GAAP basis, net income for the six months ended January 31, 2008, was $13,535,000, or $1.02 per diluted share, compared with a net income of $60,000, or $0.00 per diluted share, for the prior year’s first six months. The six months ended January 31, 2007, included pre-tax asset impairment charges of $9,705,000 associated with the Company’s digital radiography systems business.
On a non-GAAP basis, net income for the six months ended January 31, 2008, was $14,890,000, or $1.12 per diluted share, compared to a net income of $8,065,000, or $0.58 per diluted share, for the prior year’s first six months.
Non-GAAP net income and other non-GAAP financial measures exclude the impact of certain items. A description of these non-GAAP financial measures and a reconciliation of all GAAP to non-GAAP financial measures are presented in the financial tables at the end of this news release.
President and CEO Jim Green said, “Our medical business continued to show strong growth in the second quarter. Medical technology revenues were up 16% over the prior second quarter, and up 9% from the first quarter of fiscal year 2008. Security technology revenues were down 7% from a year earlier due primarily to a decline in engineering revenues, but security pre-tax income was $1,384,000, compared to a loss of $242,000 a year earlier. We have made substantial progress bringing our cost structure in line with our security business revenues.”
Medical imaging revenues for the second quarter were $53,620,000, up more than 15% over the prior year’s second quarter. The growth was primarily due to an increased demand for the Company’s advanced subsystems for CT, including multislice DASs and Data Management Systems (DMSs), which integrate DASs with X-ray detectors. Revenues for patient monitors and OEM ultrasound probes and transducers were also up relative to last year’s second quarter. Revenues from power systems for MRI were flat, and Medical CT revenues were down due to a short-term delay in supplier shipments. Digital Radiography revenues were $5,767,000, up from $3,967,000 in the prior second quarter, due in part to initial ramp up of flat-panel digital mammography detectors by our Anrad subsidiary. Revenues for our B-K Medical subsidiary, specializing in clinical ultrasound, were $24,698,000, up over the prior year due primarily to changes in foreign exchange rates.
Security technology revenues for the quarter were $12,875,000, down slightly from a year earlier. During the quarter, the Company shipped 18 EXplosive Assessment Computed Tomography (EXACT®) systems to L-3 Communications, the same quantity shipped during the second quarter of fiscal 2007. The slight decrease in revenues was due to a decline in engineering revenues. Just after the close of the quarter, Analogic announced that it had received a $15 million order from L-3 for EXACT systems to begin shipping in June 2008.
Green added that the recent agreement to acquire Copley Controls Corporation, a leading OEM supplier of gradient amplifiers for MRI systems and of precision motion control systems, announced after the close of the quarter, was another major step forward for the Company. “The addition of Copley Controls will strongly complement our core medical business. With Copley’s leading-edge technology in high-field gradient amplifiers, we will be able to expand our product offerings to our OEM customers, better address some significant emerging MRI opportunities in Asia, and further enhance our position as a leading OEM supplier of high-value medical imaging subsystems.”
Optimistic regarding continuing growth, Green noted that at the annual Radiological Society of North America (RSNA) meeting in November 2007 both Siemens and Philips introduced top-of-the-line full-field digital mammography systems that incorporate Anrad’s advanced digital flat-panel detectors. “We expect that production of these major new systems will ramp up over the next several quarters. Their introduction should generate significant growth in digital mammography and in the demand for Anrad’s proprietary amorphous-Selenium-based digital mammography detectors over the next several years.”
Green added, “We expect our COBRA® automatic explosives and weapons detection system for aircraft passenger checkpoints to be qualified for sale by the U.S. Transportation Security Administration (TSA) within the next several months. Before the end of the fiscal year we expect to begin shipping units under the Indefinite Delivery Indefinite Quantity (IDIQ) order received from the TSA last October. Concurrently, we anticipate that the KING COBRA system, designed to scan checked and checkpoint baggage at small to mid-sized airports, will be certified within the next several months and production-ready this summer. The XLB™1100 ultra-high-speed, inline checked baggage scanning system is expected to be certified by the TSA several months after the KING COBRA and production-ready in calendar 2009. Subsequent to the end of the quarter we announced an expanded relationship with L-3 Communications, awarding them exclusive worldwide rights to market and service the KING COBRA and the XLB1100 Auto-EDS systems for air carrier checked-baggage applications. With the continuing growth in our medical businesses and the new opportunities in both health and security, I believe we are establishing the foundation for Analogic’s long-term growth as The World Resource for Health and Security Technology.”
Use of Non-GAAP Financial Measures
This presentation includes non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on our reported results and, therefore, should not be relied upon as the sole financial measures to evaluate our financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. An explanation and a reconciliation of our non-GAAP measures are provided at the end of this press release.
Conference Call
Analogic will conduct an investor conference call on Thursday, March 6, 2008 at 11:00 a.m. ET to discuss the results for the second quarter and recent developments. To participate in the conference call, dial 1-866-823-6992, or 1-334-323-7225 for international callers, approximately ten minutes before the conference is scheduled to begin. Inform the operator that you wish to join the Analogic conference, Passcode 03391. You will then be asked for your name, organization, and telephone number and be connected to the conference. Presentation materials related to quarterly financial information will be posted on the Company’s website at www.analogic.com. To listen to the live audio webcast in listen-only mode, visit www.analogic.com approximately ten minutes before the conference is scheduled to begin.
A telephone digital replay will be available approximately two hours after the call is completed through midnight (ET) Thursday, March 27, 2008. To access the digital replay, dial 1-877-919-4059, or 1-334-323-7226 for international callers. The conference ID number is 13103403.
A replay of the conference call webcast will be archived on the Company’s website at www.analogic.com approximately three hours after the call is completed and will be available through midnight (ET) Thursday, March 27, 2008.
For more information on the conference call, visit www.analogic.com, call 978-326-4213, or email proberts@analogic.com.
About Analogic
Analogic Corporation is a leading designer and manufacturer of high-precision health and security imaging equipment sold primarily to Original Equipment Manufacturers. The Company is recognized worldwide for advancing the state of the art in Automatic Explosives Detection, Computed Tomography, Digital Radiography, Ultrasound, Magnetic Resonance Imaging, Patient Monitoring, and Advanced Signal Processing.
Forward-Looking Statements
This press release contains the Company’s or management’s intentions, hopes, beliefs, expectations, or predictions. These are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements (statements that are not historical facts) in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements, including statements about product development, market and industry trends, strategic initiatives, regulatory approvals, sales, profits, expenses, price trends, research and development expenses and trends, and capital expenditures involve risk and uncertainties. Actual results may differ materially from those indicated by such statements as a result of various factors, including those discussed in the Company’s periodic reports filed with the SEC under the heading “Risk Factors.” In addition, the forward-looking statements included in this press release represent the Company’s views as of March 6, 2008. The Company anticipates that subsequent events and developments will cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to March 6, 2008.
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