Analogic Corporation Announces Revenues and Earnings for Its First Quarter.

Business Editors

PEABODY, Mass.--(BUSINESS WIRE)--Dec. 12, 2001

Analogic Corporation (NASDAQ:ALOG), a leading custom designer and manufacturer of high precision medical diagnostic and security equipment, announced today revenues and earnings for its first quarter ending October 31, 2001.

Revenues for the first quarter ending October 31, 2001, were $75,802,000, compared with the prior year's first quarter revenues of $81,597,000, a decrease of 7%. In conjunction with the Corporation's focus on the health care and security markets, a $8,883,000 write-off of assets related to its telecommunications and semiconductor businesses was taken in this period. The effect of this write down was to reduce net income from $736,000 to a net loss of $6,370,000, or from $0.06 per diluted share to a loss of $0.49 per diluted share. This compares with a net income of $4,639,000, or $.36 per diluted share, for the prior year's first quarter.

Tom Miller, President and CEO, stated, "The Company is eliminating unprofitable non-core activities and reducing certain expenses added during the past year. Toward this end during the last quarter we have written off $3,578,000 of assets relating to certain Voice over Internet Protocol products of our Anatel Communications subsidiary. Assets totaling $5,305,000 related to our Test and Measurement business have also been written off, and the Company is refocusing its activities in that market. These two businesses contributed only $1,005,000 in revenues in Q1 of 2002 compared to $11,963,000 in the comparable period last year. This resulted in operating losses of $3,527,000 from these two activities in Q1 of 2002 before asset write downs. As we cannot predict when market conditions in these sectors may become favorable, we have taken steps to reduce or eliminate the majority of those activities. We are also taking additional measures to further reduce overall expenses in light of the ongoing recession.

Despite the recession, the quarter saw a modest growth in the sale of Computed Tomography and Digital Radiography equipment. Also, our Anrad, B-K Medical, Camtronics Medical Systems and SKY Computers subsidiaries all improved over the same quarter for the prior year. Overall, we believe that the fundamentals of our medical business remain sound."

Bernard M. Gordon, Executive Chairman and Chairman of the Board, commented, "In the future, the Corporation will focus its efforts in the growing health care and security markets, which share many common technologies. Although this is the first quarterly loss in the nearly thirty years of the history of the Company, we believe that the write-off we have taken is a necessary and prudent response to the present dismal status of the semiconductor and telecommunications industries. This is also in alignment with our intention to sharpen our business focus."

Bernard Gordon added, "We expect that the second quarter will also be difficult, but we continue to be cautiously optimistic for the remainder of the year. We anticipate renewed activity in our security detection segment, but as yet our OEM customers have not received firm orders for certified Explosive Detection Systems (EDS's) that they anticipate from the U.S. Government. Such orders are expected in the near future to help meet the deadlines recently established by Congress regarding 100% screening of checked baggage. We have already taken measures to expand our production capabilities to help meet the projected demand for high-speed, high volume EDS systems."

Work continues for OEM customers on two prototypes of more economical explosive detection systems intended for smaller, regional airports. These systems should be submitted for certification to the FAA early next calendar year. Production of both systems, when certified, can be accelerated rapidly to help meet the security needs for air travel.

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 which 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 and actual events and results may differ significantly from those in any forward-looking statements. 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.

Condensed Consolidated Statements of Income
(Unaudited) (in Thousands, except share data)

                                    Three Months Ended October 31
                                           2001      2000

Net revenue
   Product                               $65,353   $71,735
   Engineering                             7,477     5,743
   Other revenue                           2,972     4,119
Total net revenue                        $75,802   $81,597

Income (loss) from operations(a)          (9,689)  $ 5,023
Other (income) expense:
   Interest income, net                   (1,155)   (1,485)
   Equity in unconsolidated affiliates      (738)     (811)
   Other, net                                166       384

Income (loss) before income taxes
 and minority interest                    (7,962)  $ 6,935
Provision for Income Taxes                (1,592)    2,212
Minority Interest                              0        84
   Net Income (loss)                      (6,370)  $ 4,639

Earnings per common share:
   Basic                                   (0.49)     0.36
   Diluted                                 (0.49)     0.36
Dividends Declared Per Share             $  0.07   $  0.07

Shares Outstanding:
   Basic                                  13,093    12,879
   Diluted                                13,093    12,932

(a) Loss from operations includes $8,883 in asset impairment changes
related to the Company's telecommunications and semiconductor
businesses.



Condensed Consolidated Balance Sheets
in thousands
                                            31-Oct-01   31-Jul-01
                                           (Unaudited)  (Audited)
Assets:
   Cash & cash equivalents                   $126,916   $122,912
   Accounts & notes receivable, net            55,355     68,287
   Inventories                                 59,196     60,696
   Prepaid expenses & other current assets     17,234     16,455

      Total current assets                   $258,701   $268,350
   Property, plant, & equipment, net           71,543     68,846
   Other assets                                18,587     15,323
      Total assets                           $348,831   $352,519

Liabilities & Stockholders' Equity:
   Mortgage and other notes payable          $    660   $    644
   Accounts payable                            16,636     15,378
   Accrued liabilities                         24,308     26,183
   Accrued income taxes                         1,786      1,646
      Total current liabilities              $ 43,390   $ 43,851

   Long-term debt                               8,729      5,560
   Deferred income taxes                        2,153      1,836
   Other liabilities                            1,080      1,135
      Total long-term liabilities            $ 11,962   $  8,531
Stockholders' Equity                          293,479    300,137
Total Liabilities and Stockholders' Equity   $348,831   $352,519