Analogic Corporation Announces Revenues and Earnings for Its Fourth Quarter and Fiscal Year Ended July 31, 2006
Analogic Corporation Announces Revenues and Earnings for Its Fourth Quarter and Fiscal Year Ended July 31, 2006
PEABODY, Mass., Sep 26, 2006 (BUSINESS WIRE) — Analogic Corporation (NASDAQ: ALOG), a leading designer and
manufacturer of high-precision health and security imaging equipment,
today announced revenues and earnings for its fourth quarter and
twelve-month period ended July 31, 2006.
Revenues from continuing operations for the fourth quarter ended
July 31, 2006, were $83,718,000, compared with the prior year’s
fourth-quarter revenues from continuing operations of $90,657,000, a
decrease of $6,939,000, or 7.7%. The net loss from continuing
operations for the quarter ended July 31, 2006, was $8,070,000, or a
loss of $0.59 per diluted share, compared with net income from
continuing operations of $6,238,000, or $0.44 per diluted share, for
the prior year’s fourth quarter. During the quarter ended July 31,
2006, the Company recorded restructuring and asset impairment charges
totaling $12,085,000 related to a $7,730,000 writedown of capitalized
software and inventory on hand in excess of estimated future
requirements related to a medical Computed Tomography (CT) development
program, a $3,850,000 writedown related to the Company’s decision to
discontinue the development of a medical CT workstation, and asset
impairment and restructuring charges of $505,000 related to the fiscal
2006 closure of the Company’s SKY Computers subsidiary.
Net loss attributable to discontinued operations and net loss from
disposal of discontinued operations for the three months ended July
31, 2006, was $453,000, or a loss of $0.04 per diluted share. This
compares to a net loss from discontinued operations of $1,951,000, or
a loss of $0.13 per diluted share, for the prior year.
Net loss for the fourth quarter ended July 31, 2006, was
$8,523,000, or a loss of $0.63 per diluted share, compared with a net
income of $4,287,000, or $0.31 per diluted share, for the prior year’s
fourth quarter.
Revenues for the twelve months ended July 31, 2006, were
$351,445,000, compared with the prior year’s revenues of $326,479,000,
an increase of $24,966,000 or 7.6%. Net income from continuing
operations for the twelve-month period was $4,600,000, or $0.33 per
diluted share, compared with $34,659,000, or $2.54 per diluted share,
for the same period a year ago, a decrease of $30,059,000.
During the twelve-month period ended July 31, 2006, the Company
recorded asset impairment charges of $14,876,000 related to a
$7,730,000 writedown of capitalized software and inventory on hand in
excess of future estimated requirements related to a medical CT
development program, a $3,850,000 writedown related to the Company’s
decision to discontinue the development of a medical CT workstation,
$2,805,000 related to the closure of SKY Computers, Inc., and $491,000
related to the writedown of certain assets to their net realizable
value.
During the year ended July 31, 2006, the Company realized a net
gain of $20,207,000, or $1.46 per diluted share, from the sale of its
Camtronics Medical Systems subsidiary to Emageon, Inc. of Birmingham,
Alabama, on November 1, 2005. As a result of the sale, the Company
classified the Camtronics business as a discontinued operation and
recast its financial statements accordingly to represent the operation
as discontinued. During the prior fiscal year, the Company recorded a
pre-tax gain of $43,829,000 from the sale of its 14.6% equity interest
in Cedara Software Corporation of Mississauga, Ontario, Canada.
Net income attributable to discontinued operations, the cumulative
effect of a change in accounting principle, and the gain on disposal
of discontinued operations for the twelve months ended July 31, 2006,
was $20,466,000, or $1.48 per diluted share. This compares to a net
loss from discontinued operations of $5,797,000, or a loss of $0.42
per diluted share, for the prior year.
Net income for the twelve months ended July 31, 2006, was
$25,066,000, or $1.81 per diluted share, compared with a net income of
$28,862,000, or $2.12 per diluted share, for the same period a year
earlier.
Comments on the Medical Imaging Business
John Wood, Analogic President and CEO, said, “Fourth-quarter sales
of ultrasound systems and subsystems were up significantly from a year
ago, as were sales of digital radiography subsystems, but overall
results for the quarter were not satisfactory. High-performance CT
subsystem revenues were at about the same level as a year earlier, and
sales of Magnetic Resonance Imaging (MRI) subsystems were down
slightly. Results for Anrad, our digital radiography detector
subsidiary, improved from a year ago and from the sequential third
quarter, but still did not meet our expectations. ANEXA, our
subsidiary that markets digital radiography systems directly to end
users in niche markets, also fell short of our expectations for the
quarter.
“A technology leader in the radiation therapy market, which has
been a major Original Equipment Manufacturer (OEM) customer for
several years, has extended its relationship with Analogic by recently
awarding the Company a $17 million, one-year supply and manufacturing
contract to provide CT Data Acquisition Systems (DASs) and detectors,
as well as mechanical and other assemblies, designed to provide
advanced imaging functionality for an Intensity Modulated Radiation
Therapy (IMRT) device.
“Despite the fourth-quarter writedowns and the
slower-than-expected growth of our digital radiography subsystems and
systems businesses, we expect the considerable progress we made this
year in medical imaging, highlighted by CT DASs and ultrasound
transducers, to continue in fiscal 2007,” Wood said. “We have
completed prototype development of PowerLink, an innovative brushless
power transmission and optical data link system (patent pending) for
CT, which we are employing on the XLB1100 security scanner. We are in
proof-of-concept stage for a complete power chain, including brushless
transmission, for medical CT.
“Our B-K Medical subsidiary launched the new Pro Focus line of
advanced ultrasound scanners and new transducers, which have been well
received by the market. We also began shipping LIFEGARD® II patient
monitors, which measure a number of parameters such as cardiac output
and end-tidal CO2 non-invasively.
Comments on the Security Imaging Business
“Opportunities continue to multiply on the security side of our
business,” Wood said. “The events of the past two months have focused
increased attention on aviation security and on the technological
advances that Analogic is bringing to improved security for checked
luggage and the checkpoint. We have made considerable progress in
security technology and now look to translate that into commercial
success for a number of markets.
“As expected, fourth-quarter sales of security imaging systems
were down substantially from a year ago, reflecting the completion of
a major order in the quarter,” said Wood. “A number of EXplosive
Assessment Computed Tomography (EXACT™) systems originally
scheduled for delivery this quarter had been shipped earlier in the
fiscal year per the customer’s request. As previously announced, this
reduced our backlog for the third and fourth quarters. We shipped 11
EXACT units in the fourth quarter, down from 36 systems in the prior
fourth quarter, as we awaited a new order for EXACT systems from our
OEM customer.
“As we announced separately today, we recently received from L-3
Communications’ (NYSE: LLL) subsidiary, L-3 Communications Security
and Detection Systems, Inc., an order for the Company’s EXACT systems.
Under the terms of the order, Analogic will ship units valued at a
minimum of $31,000,000 and a maximum $36,000,000 beginning in October
2006 and continuing through January 2008,” Wood said. “We expect to
convert many of these units into upgraded AN6400 EXACT systems after
our AN6400 completes the U.S. Transportation Security Administration’s
(TSA) Operational Unit Evaluation (OUE). We also announced today that
the OUE process is moving forward. The Company has received an order
from L-3 Communications Security and Detection Systems, Inc., to
install four AN6400 EXACT System upgrade kits at John Wayne Airport in
Orange County, California, as part of the OUE. With their
state-of-the-art workstation and networking capability, these upgraded
EXACT systems will demonstrate Analogic’s latest advances in improved
detection and higher baggage throughput.
“The Company is continuing development work on three other major
security system programs,” Wood said. “One of these programs, the
COBRA™, is an advanced checkpoint explosives and weapons threat
detection system. A new COBRA prototype recently completed gathering
data on thousands of carry-on items at Boston’s Logan International
Airport. COBRA has attracted international attention in light of the
recently foiled British terrorist plot, and is scheduled for
submission to the TSA for certification early next year. We have just
received a $3.8 million order for five COBRA systems from the TSA. The
Company will install these units and provide service at several
airports beginning in early 2007. This is an important step forward
for Analogic.
“The Company is also developing the KING COBRA, a system designed
to scan checked luggage at small to mid-sized airports, which is
scheduled to be submitted for certification next spring,” said Wood.
“A new generation of high-speed Explosives Detection Systems (EDSs),
the XLB1100, is also in development. With a one-meter bore and a
scanning rate of up to 1,100 bags per hour, the XLB should be
submitted to the TSA for certification by next summer. The COBRA, KING
COBRA, and XLB1100 have all been developed with partial funding from
the TSA.
“Looking forward, we plan to continue the strategic evaluation of
our business structure, focusing our resources on opportunities with
the greatest potential for sustainable growth and profitability.
Building on our proven ability to deliver engineering excellence and
innovative products, we believe that Analogic is creating a strong
foundation for long-term success as The World Resource for Health and
Security Technology,” Wood concluded.
Conference Call
Analogic will conduct an investor conference call on Tuesday,
September 26, at 11:00 a.m. ET to discuss the fourth-quarter and
fiscal-year 2006 results and recent developments. To participate in
the conference call dial 1-888-823-6992 approximately five to ten
minutes before the conference is scheduled to begin. Inform the
operator that you wish to join the Analogic conference. 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,
visit www.analogic.com approximately five to ten minutes before the
conference is scheduled to begin.
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 Tuesday, October
17, 2006.
A telephone digital replay will be available approximately two
hours after the call is completed through midnight (ET) Tuesday,
October 3, 2006. To access the digital replay, dial 1-877-919-4059.
The conference ID number is 47454474. 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
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.
Forward-Looking Statements
Any statements in this press release about future expectations,
plans, and prospects for the Company, including statements about
orders for the Company’s products, statements about shipments and
installation of the Company’s products, and other statements
containing the words “believes,” “anticipates,” “plans,” “expects,”
and similar expressions, constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by such
forward-looking statements as a result of various important factors,
including risks relating to technology development and
commercialization, risks in product development, limited demand for
the Company’s products, risks associated with competition,
uncertainties associated with regulatory agency approvals, competitive
pricing pressures, downturns in the economy, the risk of potential
intellectual property litigation, and other factors discussed in our
most recent quarterly report filed with the Securities and Exchange
Commission. In addition, the forward-looking statements included in
this press release represent the Company’s views as of September 26,
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
September 26, 2006.
Consolidated Statements of Operations (in thousands, except share
data)
Three Months Ended Twelve Months Ended
July 31, July 31,
------------------ -------------------
(Unaudited) (Audited)
2006 2005 2006 2005
--------- -------- --------- ---------
Net Revenue:
Products $76,131 $82,391 $323,486 $298,157
Engineering 4,513 5,538 17,859 19,168
Other 3,074 2,728 10,100 9,154
--------- -------- --------- ---------
Total net revenue 83,718 90,657 351,445 326,479
--------- -------- --------- ---------
Cost of sales:
Products 49,502 48,557 197,605 181,164
Engineering 5,899 5,300 19,963 16,659
Other 1,455 1,292 5,381 5,266
Asset impairment charges 6,182 -- 7,361 --
--------- -------- --------- ---------
Total cost of sales 63,038 55,149 230,310 203,089
--------- -------- --------- ---------
Gross margin 20,680 35,508 121,135 123,390
--------- -------- --------- ---------
Operating expenses:
Research and product
development 12,232 12,037 51,790 50,470
Selling and marketing 7,642 7,474 29,242 29,168
General and administrative 10,779 11,061 37,837 39,549
Restructuring and asset
impairment charges 5,903 65 7,515 3,000
--------- -------- --------- ---------
Total operating expenses 36,556 30,637 126,384 122,187
--------- -------- --------- ---------
Income (loss) from operations (15,876) 4,871 (5,249) 1,203
--------- -------- --------- ---------
Other (income) expense:
Interest income (3,068) (1,874) (10,223) (5,243)
Interest expense 25 -- 68 2
Equity (gain) loss in
unconsolidated affiliates -- 466 787 (283)
Gain on sale of marketable
securities -- -- -- (43,829)
Other 144 265 (14) (27)
--------- -------- --------- ---------
Total other (income) expense (2,899) (1,143) (9,382) (49,380)
--------- -------- --------- ---------
Income (loss) from continuing
operations before income taxes
and cumulative effect of
change in accounting principle (12,977) 6,014 4,133 50,583
Provision (benefit) for income
taxes (4,907) (224) (467) 15,924
--------- -------- --------- ---------
Income (loss) from continuing
operations before discontinued
operations and cumulative
effect of change in accounting
principle (8,070) 6,238 4,600 34,659
Income (loss) from discontinued
operations (net of income tax
provision of $20 and $146 for
the three and twelve months
ended July 31, 2006, and
income tax benefit of $2,290
and $1,515 for the three and
twelve months ended July 31,
2005). (20) (1,951) 139 (5,797)
Gain (loss) on disposal of
discontinued operations (net
of income tax benefit of $219
and income tax provision of
$8,885 for the three and
twelve months ended July 31,
2006) (433) -- 20,207 --
Cumulative effect of change in
accounting principle (net of
income tax of $61 for the
twelve months ending July 31,
2006) -- -- 120 --
--------- -------- --------- ---------
Net income (loss) $(8,523) $4,287 $25,066 $28,862
--------- -------- --------- ---------
Basic earnings (loss) per
share:
Income (loss) from continuing
operations $(0.59) $0.45 $0.34 $2.55
Income (loss) from discontinued
operations, net of tax -- (0.13) 0.01 (0.42)
Gain (loss) on disposal of
discontinued operations, net
of tax (0.04) -- 1.47 --
Cumulative effect of change in
accounting principle, net of
tax -- -- 0.01 --
--------- -------- --------- ---------
Net income (loss) $(0.63) $0.32 $1.83 $2.13
--------- -------- --------- ---------
Diluted earnings (loss) per
share:
Income (loss) from continuing
operations $(0.59) $0.44 $0.33 $2.54
Income (loss) from discontinued
operations, net of tax -- (0.13) 0.01 (0.42)
Gain (loss) on disposal of
discontinued operations, net
of tax (0.04) -- 1.46 --
Cumulative effect of change in
accounting principle, net of
tax -- -- 0.01 --
--------- -------- --------- ---------
Net income (loss) $(0.63) $0.31 $1.81 $2.12
--------- -------- --------- ---------
Dividends declared per share $0.10 $0.08 $0.38 $0.32
Shares outstanding:
Basic 13,815 13,624 13,704 13,566
Diluted 13,912 13,711 13,853 13,619
Condensed Consolidated Balance Sheets (in thousands)
July 31, July 31,
2006 2005
--------- ---------
(Audited) (Audited)
Assets:
Cash, cash equivalents and marketable securities $258,237 $220,454
Accounts and notes receivable, net 52,112 50,978
Inventories 58,943 64,290
Other current assets 21,543 19,000
Current assets of discontinued operations -- 41,939
--------- ---------
Total current assets 390,835 396,661
Property, plant and equipment, net 81,853 79,442
Other assets 15,957 20,602
--------- ---------
Total Assets $488,645 $496,705
--------- ---------
Liabilities and Stockholders' Equity:
Accounts payable $16,898 $20,359
Accrued liabilities 24,585 20,276
Advance payments and deferred revenue 9,386 14,387
Accrued income taxes 5,011 11,167
Current liabilities of discontinued operations -- 30,445
--------- ---------
Total current liabilities 55,880 96,634
--------- ---------
Deferred income taxes 840 914
--------- ---------
Total long-term liabilities 840 914
--------- ---------
Stockholders' Equity 431,925 399,157
--------- ---------
Total Liabilities and Stockholders' Equity $488,645 $496,705
--------- ---------
SOURCE:
Analogic Corporation
CONTACT:
Analogic Corporation
John J. Millerick, 978-326-4000
Senior Vice President & CFO
Paul M. Roberts, 978-326-4213
Director of Communications
proberts@analogic.com