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adobe pdf icon Analogic Corporation Announces Results for Its First Quarter

Analogic Corporation Announces Results for Its First Quarter

Analogic Corporation Announces Results for Its First Quarter

PEABODY, Mass.–(BUSINESS WIRE)–Dec. 11, 2006–Analogic
Corporation (NASDAQ: ALOG), a leading designer and manufacturer of
high-precision health and security imaging equipment, announced today
results for its first quarter ended October 31, 2006.

Revenues for the first quarter ended October 31, 2006, were
$75,602,000, compared with the prior year’s first quarter revenues of
$86,410,000, a decrease of $10,808,000, or 13%. Net loss for the first
quarter was $5,360,000, or a $0.39 net loss per diluted share,
compared with earnings of $1,342,000, or $0.10 per diluted share, for
the prior year’s first quarter. The first quarter ended October 31,
2006, includes pre-tax asset impairment charges of $9,705,000
associated with the Company’s digital radiography systems business.
The first quarter ended October 31, 2005, included restructuring and
asset impairment charges of $2,205,000 related primarily to the
Company’s former SKY Computers subsidiary.

CEO John Wood, said, “The overall results for the quarter are
disappointing. Although our digital radiography business improved
slightly, it continued to perform well below earlier expectations. We
therefore conducted an in-depth review of the business and as a result
of this review recorded asset impairment charges of $9,705,000 related
to the writedown of certain assets to their estimated net realizable
value.”

The continuing strong performance of our core OEM Medical
Technology Products business is very encouraging. Medical technology
product sales were $67,773,000, up $6,573,000 or 11% over the prior
year’s first quarter. Revenues for clinical ultrasound systems and
subsystems, CT Data Acquisition Systems (DASs), and Computed
Tomography (CT) systems were up over good performances a year earlier.
Sales of Power Systems for Magnetic Resonance Imaging were down
slightly from a year earlier.

The decrease in overall revenue was due primarily to the expected
significant short-term decrease in sales of the Company’s EXACT
security imaging systems. Security technology product revenues were
$4,639,000, down $15,227,000 or 77% from the previous year due to the
Company shipping only 4 EXACT systems this quarter compared to 35 a
year earlier. On September 26, 2006, the Company announced that it had
received from L-3 Communications an order for $31 million – $36
million in EXACT systems through January 2008. EXACT sales therefore
are expected to resume a more consistent schedule for the second half
of this fiscal year and the first half of the next. The Company
expects to begin shipping the AN6400 upgrade to the EXACT system later
this year, and to put the COBRA checkpoint security system into
production.

Ed Becker, President and Chief Operating Officer, noted that
research and development costs were down $1,449,000, or 11%, from the
prior year’s first quarter, due primarily to the winding down of two
medical CT development programs and of a successful security imaging
project. Becker also noted that, “PhotoDetection Systems, in which we
have a substantial minority position, concluded a contract with a
major OEM in our recent fourth quarter that includes development
funding. As a result of this external funding, the Company’s equity
losses related to its investment in PhotoDetection Systems have been,
and in the future will be, significantly reduced.

Wood added, “Overall, our core medical OEM business is doing very
well. Our security business is in the midst of several weak quarters,
but the future looks promising. Early in the second quarter we placed
prototypes of two of our newest checked luggage scanning systems, the
XLB1100 designed for large airports and the KING COBRA designed
primarily for small to mid-sized airports, into Logan International
Airport in Boston for initial data gathering. In January we will begin
shipping five COBRA prototypes to the TSA and several airports to
begin visual screening in the field.

“As indicated last quarter, the Company is continuing to evaluate
its business structure, focusing our resources on those opportunities
with the greatest potential for sustainable growth and profitability.
We believe that only in this way can we establish the foundation for
long-term growth as The World Resource for Health and Security
Technology.”

CONFERENCE CALL

Analogic will conduct an investor conference call on Monday,
December 11, at 11:00 a.m. ET to discuss the results for the first
quarter and recent developments. To participate in the conference
call, dial 1-866-823-6992, or 1-334-323-7225 for international
callers, approximately five to 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. To listen to the live audio webcast in listen-only mode,
visit www.analogic.com approximately five to 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) Monday,
December 18, 2006. To access the digital replay, dial 1-877-919-4059,
or 1-334-323-7226 for international callers. The conference ID number
is 65063250

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)
Monday, January 1, 2007.

For more information on the conference call, visit
www.analogic.com, call 978-326-4213, or email proberts@analogic.com.

Analogic Corporation is a leading designer and manufacturer of
advanced health and security systems and subsystems sold primarily to
Original Equipment Manufacturers (OEMs). The Company is recognized
worldwide for advancing the state of the art in Computed Tomography
(CT), Digital Radiography (DR), Ultrasound, Magnetic Resonance Imaging
(MRI), and Patient Monitoring. For more information, visit
www.analogic.com.

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 “Business Environment and
Risk Factors.” In addition, the forward-looking statements included in
this press release represent the Company’s views as of December 11,
2006. 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 December
11, 2006.

Condensed Consolidated Statements of Operations (in thousands, except
 share data)
                                                       Three Months
                                                            Ended
                                                        October 31,
                                                      ----------------
                                                        (Unaudited)
                                                       2006    2005
                                                      ----------------
Net Revenue:
Products                                              $70,748 $79,721
Engineering                                             1,664   3,812
Other                                                   3,190   2,877
                                                      ----------------
Total net revenue                                      75,602  86,410
                                                      ----------------
Cost of sales:
Products                                               44,589  47,823
Engineering                                             2,863   5,733
Other                                                   1,487   1,386
Asset impairment charges                                8,625   1,179
                                                      ----------------
Total cost of sales                                    57,564  56,121
                                                      ----------------
Gross margin                                           18,038  30,289
                                                      ----------------
Operating expenses:
Research and product development                       11,578  13,027
Selling and marketing                                   7,002   7,354
General and administrative                              9,039   8,664
Restructuring and asset impairment charges              1,080   1,025
                                                      ----------------
Total operating expenses                               28,699  30,070
                                                      ----------------
Income (loss) from operations                         (10,661)    219
                                                      ----------------
Other (income) expense:
Interest income                                        (3,224) (2,033)
Interest expense                                            1      --
Equity (gain) in unconsolidated affiliates                 78     570
Other                                                     122     157
                                                      ----------------
Total other (income) expense                           (3,023) (1,306)
                                                      ----------------
Income (loss) from continuing operations before income
 taxes
and cumulative effect of change in accounting
 principle                                             (7,638)  1,525
Provision (benefit) for income taxes                   (2,278)    462
                                                      ----------------
Income (loss) from continuing operations before
 discontinued
operations and cumulative effect of change in
 accounting principle                                  (5,360)  1,063
Income from discontinued operations (net of income
 taxes of $126)                                            --     159
Cumulative effect of change in accounting principle
 (net of income tax of $61)                                --     120
                                                      ----------------
Net income (loss)                                     $(5,360) $1,342
                                                      ----------------
Basic earnings (loss) per share:
Income (loss) from continuing operations               $(0.39)  $0.08
Income from discontinued operations, net of tax            --    0.01
Cumulative effect of change in accounting principle,
 net of tax                                                --    0.01
                                                      ----------------
Net income (loss)                                      $(0.39)  $0.10
Diluted earnings (loss) per share:
Income (loss) from continuing operations               $(0.39)  $0.08
Income from discontinued operations, net of tax            --    0.01
Cumulative effect of change in accounting principle,
 net of tax                                                --    0.01
                                                      ----------------
Net income (loss)                                      $(0.39)  $0.10
                                                      ----------------
Dividends declared per share                            $0.10   $0.10
Shares outstanding:
Basic                                                  13,827  13,631
Diluted                                                13,827  13,734

Condensed Consolidated Balance Sheets (in thousands)
                                                 October 31, July 31,
                                                    2006       2006
                                                 ----------- ---------
                                                 (Unaudited) (Audited)
Assets:
Cash, cash equivalents and marketable securities   $262,065  $258,237
Accounts and notes receivable, net                   45,749    52,112
Inventories                                          61,400    58,943
Other current assets                                 20,910    21,543
                                                 ----------- ---------
Total current assets                                390,124   390,835
Property, plant and equipment, net                   80,775    81,853
Other assets                                         13,792    15,957
                                                 ----------- ---------
Total Assets                                       $484,691  $488,645
                                                 ----------- ---------
Liabilities and Stockholders' Equity:
Accounts payable                                    $23,116   $17,372
Accrued liabilities                                  21,694    24,111
Advance payments and deferred revenue                 7,782     9,386
Accrued income taxes                                  5,015     5,011
                                                 ----------- ---------
Total current liabilities                            57,607    55,880
                                                 ----------- ---------
Deferred income taxes                                   619       840
                                                 ----------- ---------
Total long-term liabilities                             619       840
                                                 ----------- ---------
Stockholders' Equity                                426,465   431,925
                                                 ----------- ---------
Total Liabilities and Stockholders' Equity         $484,691  $488,645
                                                 ----------- ---------

CONTACT:
For Analogic Corporation
John J. Millerick, 978-326-4000
Senior Vice President & CFO

Paul M. Roberts, 978-326-4213
Director of Communications
proberts@analogic.com

SOURCE:
Analogic Corporation