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adobe pdf icon Analogic Corporation Reports Results for Its Second Quarter 2006

Analogic Corporation Reports Results for Its Second Quarter 2006

Analogic Corporation Reports Results for Its Second Quarter 2006

PEABODY, Mass.–(BUSINESS WIRE)–March 9, 2006–Analogic
Corporation (NASDAQ: ALOG), a leading designer and manufacturer of
high-precision health and security imaging equipment, announced today
results for its second quarter ended January 31, 2006.

Revenues from continuing operations for the second quarter ended
January 31, 2006, were $100,011,000, compared with the prior year’s
second quarter revenues from continuing operations of $76,110,000, an
increase of 31%. Net income from continuing operations for the second
quarter was $9,097,000, or $0.66 per diluted share, compared to a net
loss of $2,046,000, or a net loss of $0.15 per diluted share, from
continuing operations a year earlier.

Net income attributable to the gain on disposal of discontinued
operations for the second quarter ended January 31, 2006, was
$20,640,000, or $1.50 per diluted share.

Net income for the quarter was $29,737,000, or $2.16 per diluted
share, compared with a net loss of $3,710,000, or a loss of $0.27 per
diluted share, for the prior year’s second quarter.

Revenues from continuing operations for the six months ended
January 31, 2006, were $186,421,000, compared with the prior year’s
six-month revenues from continuing operations of $151,240,000, an
increase of 23%. Income from continuing operations for the six-month
period was $10,160,000, or $0.74 per diluted share, compared to a net
loss of $568,000, or a loss of $0.04 per diluted share, from
continuing operations for the same period a year earlier. The
financial results for the six-month period include pre-tax
restructuring and asset impairment charges of $2,216,000 associated
with the Company’s SKY Computers subsidiary.

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 six months ended January 31, 2006,
was $20,919,000, or $1.52 per diluted share. This compares to a net
loss from discontinued operations of $2,977,000, or a loss of $0.22
per diluted share, for the prior year’s first six months.

Net income for the first six months ended January 31, 2006, was
$31,079,000, or $2.26 per diluted share, compared with a net loss of
$3,545,000, or a loss of $0.26 per diluted share, for the same period
a year earlier.

On November 1, 2006, the Company sold all its stock in its
Camtronics Medical Systems, Ltd., subsidiary, located in Hartland,
Wisconsin, to Emageon Inc., of Birmingham, Alabama, for $40 million in
cash. The Company, as a result of the sale, has classified the
Camtronics business as a discontinued operation and has recast its
financial statements accordingly to represent the operation as
discontinued. During the quarter ending January 31, 2006, the Company
realized a net gain of $20,640,000 after taxes, or $1.50 per diluted
share, from the sale of Camtronics.

John Wood, President and CEO, commented, “We are pleased with the
results for this quarter.” Security revenues improved significantly
over a year ago, due primarily to the shipment of 44 EXplosive
Assessment Computed Tomography (EXACT) systems, compared to only 7
systems shipped in the quarter a year earlier. Sales of medical
products also improved for the quarter. Shipments of Data Acquisition
Systems (DASs) for CT were up over a very strong second quarter a year
ago. Deliveries of flat-panel detectors for Digital Radiography (DR)
by our Anrad subsidiary increased substantially over the same period a
year earlier. Shipments of ultrasound probes by our Sound Technology,
Inc., (STI) subsidiary were up, as were deliveries of patient
monitors, reflecting in part the appeal of new families of monitors we
are supplying to a major Original Equipment Manufacturer (OEM)
customer. Sales of clinical ultrasound systems and of power systems
for Magnetic Resonance Imaging (MRI) were down from a year earlier.

Research and product development costs for the second quarter were
$14,149,000, or 14% of total revenue, compared to $13,219,000, or 17%
of total revenue, for the prior year’s second quarter. The increase
was due primarily to additional personnel costs as the Company
accelerated development of the heart of a new medical CT system for an
OEM customer and of new security products. Engineering revenues for
the quarter were $6,119,000, compared to $3,169,000 a year earlier.

Development continues on a number of other new medical products.
At PhotoDetection Systems, where we have a minority investment, the
first human images were taken with its new Positron Emission
Tomography (PET) system, which employs innovative detector technology
for a new generation of hybrid PET/CTs. Progress continues on the
development of new generations of high-performance subsystems for
multi-slice CT, MRI, and clinical ultrasound applications.

During the quarter, a prototype of our major upgrade for existing
Explosives Detection Systems (EDSs) to examine checked luggage at
airports was installed in the first of two major airports for full
field trials. We expect the trials to be successfully completed over
the next several months and that the upgrade will be available later
this fiscal year. Additional development work continues on our COBRA
advanced checkpoint security system, which we expect to provide to the
U.S. Transportation Security Administration (TSA) for trial early next
fiscal year, and on the next generation of EDS systems, which we
expect to submit to the TSA for testing by the middle of next fiscal
year.

“This quarter reflects growth in several product areas that have
been going through lengthy technical development curves,” said Wood.
“Success in these product areas, along with substantial progress in
other major medical and security projects currently in development,
will provide the opportunity for substantial long-term growth for the
Company as The World Resource for Health and Security Technology.”

CONFERENCE CALL

Analogic will conduct an investor conference call on Thursday,
March 9 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 approximately five to ten minutes before the conference
is scheduled to begin. Inform the operator that you wish to join the
Analogic conference, Pass Code 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, 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 midnight (ET)
Thursday, March 30, 2006.

A telephone digital replay will be available approximately two
hours after the call is completed through midnight (ET) March 13,
2006. To access the digital replay, dial 1-877-919-4059. The
conference ID number is 21522500. 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), Patient Monitoring, and Embedded Multicomputing.

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 March 9, 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 March 9,
2006.

                 Consolidated Statements of Operations
                   (in thousands,except share data)

                                     Three Months       Six Months
                                        Ended             Ended
                                     January 31,        January 31,
                                 ----------------- -------------------
                                    (Unaudited)        (Unaudited)
                                  2006     2005      2006      2005
                                 -------- -------- --------- ---------
Net Revenue:
Product                          $91,964  $70,995  $171,685  $138,120
Engineering                        6,119    3,169     9,931     8,409
Other                              1,928    1,946     4,805     4,711
                                 -------- -------- --------- ---------
Total net revenue                100,011   76,110   186,421   151,240
                                 -------- -------- --------- ---------
Cost of sales:
Product                           53,674   43,216   102,676    85,064
Engineering                        4,109    3,480     9,842     7,542
Other                              1,192    1,280     2,578     2,718
                                 -------- -------- --------- ---------
Total cost of sales               58,975   47,976   115,096    95,324
                                 -------- -------- --------- ---------
Gross margin                      41,036   28,134    71,325    55,916
                                 -------- -------- --------- ---------
Operating expenses:
Research and product development  14,149   13,219    27,176    24,893
Selling and marketing              7,274    7,803    14,628    14,522
General and administrative         9,637    9,305    18,301    18,520
Restructuring and asset
 impairment charges                  503      947     1,528       947
                                 -------- -------- --------- ---------
Total operating expenses          31,563   31,274    61,633    58,882
                                 -------- -------- --------- ---------
Income (loss) from operations      9,473   (3,140)    9,692    (2,966)
                                 -------- -------- --------- ---------
Other (income) expense:
Interest income                   (2,469)  (1,021)   (4,502)   (1,885)
Interest expense                      --       --        --         2
Equity (gain) loss in
 unconsolidated affiliates          (115)     350       455       223
Other                               (199)       4       (42)     (604)
                                 -------- -------- --------- ---------
Total other (income) expense      (2,783)    (667)   (4,089)   (2,264)
                                 -------- -------- --------- ---------
Income (loss) from continuing
 operations before income taxes
and cumulative effect of change
 in accounting principle          12,256   (2,473)   13,781      (702)
Provision (benefit) for income
 taxes                             3,159     (427)    3,621      (134)
                                 -------- -------- --------- ---------
Income (loss) from continuing
 operations before discontinued
operations and cumulative effect
 of change in accounting
 principle                         9,097   (2,046)   10,160      (568)
Income (loss) from discontinued
 operations (net of income tax
 provision (benefit) of ($133)
 and $141 for the three and six
 months ended January 31, 2005,
 and $126 for the six months
 ended January 31, 2006)              --   (1,664)      159    (2,977)
Gain  on disposal of
 discontinued operations (net of
 income tax of $9,104)            20,640       --    20,640        --
Cumulative effect of change in
 accounting principle (net of
 income tax of $61)                   --       --       120        --
                                 -------- -------- --------- ---------
Net income (loss)                $29,737  $(3,710)  $31,079   $(3,545)
                                 -------- -------- --------- ---------
Basic earnings (loss) per share:
Income (loss) from continuing
 operations                        $0.67   $(0.15)    $0.75    $(0.04)
Income (loss) from discontinued
 operations, net of tax               --    (0.12)     0.01     (0.22)
Gain on disposal of discontinued
 operations, net of tax             1.51       --      1.51        --
Cumulative effect of change in
 accounting principle, net of
 tax                                  --       --      0.01        --
                                 -------- -------- --------- ---------
Net income (loss)                  $2.18   $(0.27)    $2.28    $(0.26)
                                 -------- -------- --------- ---------
Diluted earnings (loss) per
 share:
Income (loss) from continuing
 operations                        $0.66   $(0.15)    $0.74    $(0.04)
                                 -------- -------- --------- ---------
Income (loss) from discontinued
 operations, net of tax                    --   (0.12)   0.01   (0.22)
Gain on disposal of discontinued
 operations, net of tax                  1.50      --    1.50      --
Cumulative effect of change in
 accounting principle, net of tax          --      --    0.01      --
                                       ------- ------- ------- -------
Net income (loss)                       $2.16  $(0.27)  $2.26  $(0.26)
                                       ------- ------- ------- -------
Dividends declared per share            $0.10   $0.08   $0.18   $0.16
Shares outstanding:
Basic                                  13,625  13,545  13,628  13,534
Diluted                                13,799  13,545  13,766  13,534


         Condensed Consolidated Balance Sheets (in thousands)

                                                 January 31,  July 31,
                                                    2006       2005
                                                 ----------- ---------
                                                 (Unaudited) (Audited)
Assets:
Cash, cash equivalents and marketable securities   $245,289  $220,454
Accounts and notes receivable, net                   57,876    50,978
Inventories                                          70,227    63,604
Other current assets                                 20,789    19,686
Current assets of discontinued operations                --    41,939
                                                 ----------- ---------
Total current assets                                394,181   396,661
Property, plant and equipment, net                   79,572    79,442
Other assets                                         19,733    20,602
                                                 ----------- ---------
Total Assets                                       $493,486  $496,705
                                                 ----------- ---------
Liabilities and Stockholders' Equity:
Accounts payable                                    $20,209   $20,833
Accrued liabilities                                  20,116    19,802
Advance payments and deferred revenue                 8,049    14,387
Accrued income taxes                                 13,436    11,167
Current liabilities of discontinued operations           --    30,445
                                                 ----------- ---------
Total current  liabilities                           61,810    96,634
                                                 ----------- ---------
Deferred income taxes                                 1,060       914
                                                 ----------- ---------
Total long term liabilities                           1,060       914
                                                 ----------- ---------
Stockholders' Equity                                430,616   399,157
                                                 ----------- ---------
Total Liabilities and Stockholders' Equity         $493,486  $496,705
                                                 ----------- ---------

CONTACT: Analogic Corporation
John J. Millerick, 978-326-4000
Senior Vice President & CFO
or
Paul M. Roberts, 978-326-4213
Director of Communications
proberts@analogic.com

SOURCE: Analogic Corporation