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adobe pdf icon Analogic Corporation Reports Results for Its Third Quarter 2007

Analogic Corporation Reports Results for Its Third Quarter 2007

Analogic Corporation Reports Results for Its Third Quarter 2007

PEABODY, Mass.–(BUSINESS WIRE)–June 7, 2007–Analogic
Corporation (NASDAQ: ALOG), a leading designer and manufacturer of
high-precision health and security imaging equipment, announced today
results for its third quarter ended April 30, 2007.

Revenues from continuing operations for the third quarter ended
April 30, 2007, were $83,889,000, compared with the prior year’s
third-quarter revenues from continuing operations of $81,306,000, an
increase of 3%. Net income from continuing operations and net income
for the third quarter was $6,998,000, or $0.50 per diluted share,
compared to $2,510,000, or $0.18 per diluted share, from continuing
operations a year earlier.

Revenues from continuing operations for the nine months ended
April 30, 2007, were $247,849,000, compared to the prior year’s
nine-month revenues from continuing operations of $267,727,000, a
decrease of 7%. Net income from continuing operations for the
nine-month period was $7,058,000, or $0.50 per diluted share, compared
to $12,670,000, or $0.92 per diluted share, for the same period a year
earlier. During the nine-month period ended April 30, 2007, the
Company recorded pretax restructuring and asset impairment charges of
$9,705,000.

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 prior nine months ended April 30,
2006, was $20,919,000, or $1.52 per diluted share. During the first
nine months of fiscal 2006 the Company realized a net gain of
$20,640,000, or $1.50 per diluted share, from the sale of its
Camtronics Medical Systems subsidiary to Emageon, Inc. of Birmingham,
Alabama. 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.

Net income for the nine months ended April 30, 2007, was
$7,058,000, or $0.50 per diluted share, compared with a net income of
$33,589,000, or $2.44 per diluted share, for the same period a year
earlier.

Medical imaging revenues for the third quarter were up 17% over
the prior year. Revenues for clinical ultrasound systems were up 11%,
while revenues for digital radiography systems and subsystems, as
expected, were down 55%. Security technology revenues increased a
modest 3%.

Jim Green, the recently appointed President and CEO, commented,
“Under Bernard Gordon’s leadership as Executive Chairman during the
second and third quarters, the Company has made substantial progress.
The Company improved from a loss in the first quarter to a profitable
second quarter, and an even better third quarter. Bernie successfully
implemented the ten-point program he articulated last November when he
agreed to serve as Executive Chairman on an interim basis. The Company
has eliminated losses in its end-user Medical Computed Tomography (CT)
business and significantly reduced the losses for its end-user digital
radiography systems business. General and Administrative expenses have
been reduced, and Research and Development projects and related
expenditures brought under more focused control. The Company has also
initiated programs to eliminate duplication and to re-establish a
culture of interdependence among the operating units, drawing on
Analogic’s well known work ethic. As a result, Analogic is a stronger
Company today technologically and financially.

“I am particularly pleased to note that our medical business is
performing well. We appear to enjoy a growing demand for our advanced
multi-slice Data Acquisition Systems (DASs) and other subsystems for
CT. Shipments of power systems for Magnetic Resonance Imaging (MRI)
rose, although revenue for digital radiography subsystems was down
substantially from a very strong third quarter a year ago. This was
due in large part to an anticipated reduction in demand for Anrad’s
digital flat-panel detectors following record shipments last year.
However, we expect Anrad’s business to improve next fiscal year as a
result of the major contract announced in May.”

Subsequent to the end of the quarter Analogic announced an
agreement for Anrad to develop and supply advanced flat-panel digital
radiography detector plates to Siemens for a new family of digital
mammography systems. After the quarter closed, the Company also
announced an agreement granting CAS Medical Systems, Inc., of
Branford, Connecticut, exclusive worldwide rights to market and sell
Analogic’s LIFEGARD® Family of non-invasive patient monitors. This
arrangement is expected to increase sales while Analogic develops and
manufactures additional patient monitors for CAS Medical.

After the close of the third quarter, Bio-Imaging Research, Inc.
(BIR), of Lincolnshire, Illinois, of which Analogic had approximately
17% ownership, declared a dividend and made a dividend payment of
$1,429,000 to the Company on May 24, 2007. Also on that day Analogic
sold its entire ownership interest in BIR for approximately
$3,714,000, of which $2,807,000 was paid in cash upon closing with the
remaining $907,000 to be held in escrow for up to two years to secure
any indemnification claims. The Company expects to record income
before taxes on the sale and related dividend income of approximately
$4,036,000 during the fourth quarter of fiscal year 2007, and will
recognize the escrow balance, less any amount used to satisfy
indemnification claims, as income before taxes as the cash is
received.

Security revenues were essentially flat for the quarter as
Analogic shipped 15 EXplosive Assessment Computed Tomography
(EXACT) systems, compared to 17 units the previous third quarter.
An order for upgraded EXACT systems, known as the AN6400, is expected
in the relatively near future. The Company also expects its COBRA
Checkpoint Security System to be certified by the U.S. Transportation
Security Administration (TSA) this summer and additional orders to be
placed early next fiscal year.

Green concluded, “Our medical business is now growing profitably,
with a number of exciting opportunities ahead. Our security business
is preparing to put several major new systems into production over the
course of the next year. Overall, we are now well positioned to take
advantage of opportunities for significant growth, to better ensure
our future as The World Resource for Health and Security Technology.”

CONFERENCE CALL

Analogic will conduct an investor conference call on Thursday,
June 7, at 11:00 a.m. ET to discuss results for the third quarter
ended April 30, 2007, and recent developments.

Call 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 Thursday, June 28.
A telephone digital replay will be available approximately two hours
after the call is completed through midnight (ET), Thursday, June 14.
To access the digital replay, dial 1-877-919-4059, or 1-334-323-7226
for international callers. The conference ID number is 13846685. 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 Multiprocessing.

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 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 June 7, 2007. 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 June 7, 2007.

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

                                Three Months Ended  Nine Months Ended
                                    April 30,           April 30,
                                ------------------ -------------------
                                   (Unaudited)         (Unaudited)
                                  2007     2006      2007      2006
                                --------- -------- --------- ---------
Net revenue:
Products                         $76,541  $75,670  $229,851  $247,355
Engineering                        5,075    3,415    10,460    13,346
Other                              2,273    2,221     7,538     7,026
                                --------- -------- --------- ---------
Total net revenue                 83,889   81,306   247,849   267,727
                                --------- -------- --------- ---------
Cost of sales:
Products                          46,369   46,606   141,644   148,103
Engineering                        2,988    4,222     9,286    14,064
Other                              1,755    1,348     4,837     3,926
Asset impairment charges              --       --     8,625     1,179
                                --------- -------- --------- ---------
Total cost of sales               51,112   52,176   164,392   167,272
                                --------- -------- --------- ---------
Gross margin                      32,777   29,130    83,457   100,455
                                --------- -------- --------- ---------
Operating expenses:
Research and product
 development                      11,511   12,382    35,769    39,558
Selling and marketing              6,948    6,972    21,444    21,600
General and administrative         8,201    8,757    25,691    27,058
Restructuring and asset
 impairment charges                   --       84     1,080     1,612
                                --------- -------- --------- ---------
Total operating expenses          26,660   28,195    83,984    89,828
                                --------- -------- --------- ---------
Income (loss) from operations      6,117      935      (527)   10,627
                                --------- -------- --------- ---------
Other income expense:
Net interest income                3,163    2,610     9,532     7,112
Equity gain (loss) in
 unconsolidated affiliates          (456)    (332)     (587)     (787)
Other                                161      116       194       158
                                --------- -------- --------- ---------
Total other income                 2,868    2,394     9,139     6,483
                                --------- -------- --------- ---------
Income from continuing
 operations before income
 taxes, discontinued operations
 and cumulative effect of
 change in accounting principle    8,985    3,329     8,612    17,110
Provision (benefit) for income
 taxes                             1,987      819     1,554     4,440
                                --------- -------- --------- ---------
Income from continuing
 operations before discontinued
 operations and cumulative
 effect of change in accounting
 principle                         6,998    2,510     7,058    12,670
Income from discontinued
 operations (net of income
 taxes of $126)                       --       --        --       159
Gain on disposal of
 discontinued operations (net
 of income taxes of $9,104)           --       --        --    20,640
Cumulative effect of change in
 accounting principle (net of
 income taxes of $61)                 --       --        --       120
                                --------- -------- --------- ---------
Net income                        $6,998   $2,510    $7,058   $33,589
                                --------- -------- --------- ---------
Basic earnings per share:
Income from continuing
 operations                        $0.51    $0.18     $0.51     $0.93
Income from discontinued
 operations, net of tax               --       --        --      0.01
Gain on disposal of
 discontinued operations, net
 of tax                               --       --        --      1.51
Cumulative effect of change in
 accounting principle, net of
 tax                                  --       --        --      0.01
                                --------- -------- --------- ---------
Net income                         $0.51    $0.18     $0.51     $2.46
                                --------- -------- --------- ---------
Diluted earnings per share:
Income from continuing
 operations                        $0.50    $0.18     $0.50     $0.92
Income from discontinued
 operations, net of tax               --       --        --      0.01
Gain on disposal of
 discontinued operations, net
 of tax                               --       --        --      1.50
Cumulative effect of change in
 accounting principle, net of
 tax                                  --       --        --      0.01
                                --------- -------- --------- ---------
Net income                         $0.50    $0.18     $0.50     $2.44
                                --------- -------- --------- ---------
Dividends declared per share       $0.10    $0.10     $0.30     $0.28
Shares outstanding:
Basic                             13,874   13,732    13,862    13,667
Diluted                           14,003   13,956    13,981    13,834
         Condensed Consolidated Balance Sheets (in thousands)

                                                  April 30,  July 31,
                                                    2007       2006
                                                 ----------- ---------
                                                 (Unaudited) (Audited)
Assets:
Cash, cash equivalents and marketable securities   $273,755  $258,237
Accounts and notes receivable, net                   51,933    52,112
Inventories                                          55,411    55,518
Other current assets                                 29,084    24,968
                                                 ----------- ---------
Total current assets                                410,183   390,835
                                                 ----------- ---------
Property, plant and equipment, net                   81,110    81,853
Other assets                                         13,964    15,957
                                                 ----------- ---------
Total Assets                                       $505,257  $488,645
                                                 ----------- ---------
Liabilities and Stockholders' Equity:
Accounts payable                                    $19,078   $17,372
Accrued liabilities                                  23,643    24,111
Advance payments and deferred revenue                10,976     9,386
Accrued income taxes                                  8,543     5,011
                                                 ----------- ---------
Total current liabilities                            62,240    55,880
                                                 ----------- ---------
Deferred income taxes                                   977       840
                                                 ----------- ---------
Total long-term liabilities                             977       840
                                                 ----------- ---------
Stockholders' Equity                                442,040   431,925
                                                 ----------- ---------
Total Liabilities and Stockholders' Equity         $505,257  $488,645
                                                 ----------- ---------

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

SOURCE:
Analogic Corporation