Analogic Corporation Announces Revenues and Earnings for Its Fourth Quarter and Fiscal Year Ended July 31, 2001.

Business Editors

PEABODY, Mass.--(BUSINESS WIRE)--Oct. 2, 2001

Analogic Corporation (NASDAQ:ALOG), a leading custom designer and manufacturer of high precision medical and industrial diagnostic and measurement instruments and equipment, announced today revenues and earnings for its fourth quarter and twelve-month period ending July 31, 2001.

Revenues for the fourth quarter ended July 31, 2001, were a record $96,225,000 compared with the prior year's fourth quarter revenues of $87,783,000, an increase of 9.6%. Net income for the fourth quarter was $1,244,000, or $.10 per diluted share compared with $5,363,000, or $.41 per diluted share, for the prior year's fourth quarter, a decrease of 77%. Net income for the fourth quarter reflects a write-down of $3,200,000 of certain assets of Anatel. The effect of this write-down was to reduce net income from $3,484,000 to $1,244,000, or from $.27 per diluted share to $.10 per diluted share.

Revenues for the twelve months ended July 31, 2001, were a record $360,576,000, compared with the prior year's revenues of $291,581,000, an increase of 24%. Net income for the twelve-month period was $15,231,000, or $1.17 per diluted share compared with $14,066,000, or $1.09 per diluted share, for the same period a year ago, an increase of 8%.

Bernard M. Gordon, Chairman of the Board, commented, "While revenues for the quarter and the year were at record levels, earnings clearly were not. Overall, we are pleased with the growth of our medical systems and components businesses during the year, which represent about 75% of our total revenues. However, our industrial businesses, contrary to earlier expectations, suffered the effects of the drastic economic downturn in the semiconductor and telecommunications industries, negatively affecting earnings for the second half and the year.

"We believe that sluggishness in these two markets will continue for some time and are taking several actions to reduce the impact of the downturn on these businesses. Over the past year we had operating losses of approximately $9,200,000 in the operations of Anatel, the Company's telecommunications subsidiary. These included a fourth-quarter writedown of $3,200,000 of certain assets to their estimated net realizable value relating to its Voice over Internet Protocol business. We have also reduced Anatel's staffing levels and are absorbing many of its employees into Analogic's growing medical businesses.

"Our Test & Measurement business, which was growing dynamically at the beginning of Fiscal 2001, did not escape the severe downturn suffered by the semiconductor industry in the second half of the year. During the past two quarters the Test & Measurement group incurred operating losses of approximately $3,500,000, resulting in an operating loss of $600,000 for the year.

"We expect the continuing lethargy in the telecommunications and test equipment markets will significantly affect income for Fiscal 2002. In light of recent international events, we also are concerned regarding the possibility of a recession in the United States. We consequently expect earnings to be well below recent levels during the first half of the current fiscal year. Our outlook for the remainder of the year is cautiously optimistic."

Thomas J. Miller, President and CEO, observed that there had been substantial growth in medical revenues, particularly from sales of computed tomography (CT) and patient monitoring systems. Two medical subsidiaries, Camtronics and B-K Medical, also grew significantly, as did SKY Computers.

Miller noted, "Overall, we believe that the fundamentals of our medical business remain sound. The healthcare industry is a very dynamic one, with a rapidly changing landscape that affects both our customers and us. Despite some challenges in the months ahead, we see a number of major opportunities. We are placing renewed emphasis on developing and acquiring new technologies to enable us to better exploit these opportunities. For that reason, subsequent to the end of the 2001 fiscal year, we acquired a minority interest in Cedara Software Corporation (NASDAQ: CDSW; TSE: CDE). Cedara is the leading independent provider of imaging software technology and custom imaging software development for OEMs in the healthcare industry. We believe that working together, Analogic and Cedara will be able to offer more advanced, comprehensive imaging solutions to the rapidly evolving OEM market."

Bernard Gordon added, "We also expect to see renewed activity in our security detection segment, which has been a very small part of our business. The recent tragedies in the U.S. have focused public and governmental attention on increased security. We supply L-3 Communications (NYSE: LLL) with the computed tomography scanner portion of their eXaminer 3DX 6000(TM) Explosive Detection System, which scans checked luggage for aircraft. We also are designing and developing complete CT systems or subsystems for two of the three companies that received grants from the U.S. Federal Aviation Administration to develop prototypes of more economical explosive detection systems appropriate for regional airports. We are supplying CT components to the third company. We now expect these programs will be accelerated rapidly. We also believe that the acquisition of a minority interest in Cedara has the potential to significantly enhance our capabilities in security detection imaging."

Analogic is a leading custom designer and manufacturer of advanced systems and subsystems sold to major medical, industrial, and telecommunications OEMs. The Company is recognized worldwide for advancing the state of the art in Computed Tomography, Digital Radiography, Ultrasound, Magnetic Resonance Imaging (MRI), Patient Monitoring, Cardiovascular Information Management, Embedded Multicomputing, Internet Protocol Telephony, and Test and Measurement applications.

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
(in Thousands, except share data)

                         Three Months               Twelve Months
                         Ended July 31              Ended July 31
                          Unaudited                   Audited
                      2001          2000          2001         2000
Net Revenue
 Product        $    84,219   $    76,560   $   320,108  $   255,250
 Engineering          8,786         7,519        27,706       23,293
 Other Revenue        3,220         3,704        12,762       13,038
    Total Net
     Revenue    $    96,225   $    87,783   $   360,576  $   291,581

Income from
 Operations     $       198   $     6,569   $    15,907  $    16,797
Other (Income)
  Expense:
 Interest
  Income, Net        (1,148)       (1,318)       (5,402)      (5,737)
 Equity in
  Unconsolidated
  Affiliates           (698)         (660)       (1,890)       1,286
 Other, Net             130           193           646          156

Income Before
 Income Taxes
 and Minority
 Interest       $     1,914   $     8,354   $    22,553  $    21,092
Provision for
 Income Taxes           434         2,589         6,792        6,539
Minority
 Interest               236           402           530          487
   Net Income   $     1,244   $     5,363   $    15,231  $    14,066

Earnings per
 common share:
   Basic        $      0.10   $      0.42   $      1.18  $      1.10
   Diluted      $      0.10   $      0.41   $      1.17  $      1.09
Dividends
 Declared
 Per Share      $      0.07   $      0.07   $      0.28  $      0.28

Shares
 Outstanding:
   Basic         13,024,201    12,868,457    12,950,014   12,817,129
   Diluted       13,158,230    12,957,107    13,055,323   12,883,063




Condensed Consolidated Balance Sheets
(Audited) (in Thousands)

                                            31-Jul-01   31-Jul-00
Assets:
   Cash & Investments                        $122,912   $116,374
   Accounts & Notes Receivable (Net)           68,287     63,437
   Inventories                                 60,696     62,326
   Prepaid Expenses & Other Current Assets     16,455     13,750

      Total Current Assets                   $268,350   $255,887

   Property, Plant, & Equipment (Net)          67,606     63,524
   Other Assets                                16,563     13,790
      Total Assets                           $352,519   $333,201

Liabilities & Stockholders' Equity:
   Mortgage and Other Notes Payable          $    644   $  1,077
   Accounts Payable                            15,378     20,015
   Accrued Expenses                            26,183     20,038
   Accrued Income Taxes                         1,646      1,780
      Total Current Liabilities              $ 43,851   $ 42,910

   Long-Term Debt                               5,560      5,639
   Deferred Income Taxes                        1,836      2,519
   Other Liabilities                            1,135        104
   Minority Interest in Subsidiary                  0      4,268
      Total Liabilities                      $ 52,382   $ 55,440
   Stockholders' Equity                       300,137    277,761
      Total Liabilities and
       Stockholders' Equity                  $352,519   $333,201