Analogic Corporation Announces Revenues and Earnings for its First Quarter.PEABODY, Mass. -- Analogic Corporation This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALOGE), a leading designer and manufacturer of high-precision health and security imaging equipment, announced today revenues and earnings for its first quarter ended October 31, 2004. Investors should note that the comparative financial information provided for the first quarter ended October 31, 2003, has been restated. As a result, investors should no longer rely on Analogic's previously issued earnings releases or financial statements for that period. Revenues for the first quarter ended October 31, 2004, were $84,091,000, compared with the prior year's first quarter revenues of $71,709,000, an increase of $12,382,000, or 17%. Net income for the first quarter was $165,000, or $.01 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. This compares with a loss of $1,601,000, or $0.12 per diluted share, for the prior year's first quarter. The growth in revenue was due in large part to a continuing increase in demand for the Company's medical and security systems and subsystems. Medical technology product sales were up $8,526,000, or 14%, over the prior year's first quarter, reflecting increased sales of digital X-ray systems, Computed Tomography Computed tomography (CT scan) X rays are aimed at slices of the body (by rotating equipment) and results are assembled with a computer to give a three-dimensional picture of a structure. (CT) Data Acquisition Systems (DASs), power systems for Magnetic Resonance Imaging magnetic resonance imaging (MRI), noninvasive diagnostic technique that uses nuclear magnetic resonance to produce cross-sectional images of organs and other internal body structures. (MRI 1. (application) MRI - Magnetic Resonance Imaging. 2. MRI - Measurement Requirements and Interface. ), clinical ultrasound ultrasound or sonography, in medicine, technique that uses sound waves to study and treat hard-to-reach body areas. In scanning with ultrasound, high-frequency sound waves are transmitted to the area of interest and the returning echoes recorded systems, and cardiovascular information management systems. Sales of security technology products increased by $6,721,000, or 196%, over the prior year's first quarter. The growth in medical and security sales was offset in part by decreased sales of embedded Inserted into. See embedded system. multiprocessing multiprocessing Mode of computer operation in which two or more processors (see CPU) are connected and are active at the same time. In such a system, each processor is executing a different program or set of instructions, thus increasing computation speed over a systems. John Wood, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented, "First quarter revenues were about what we had expected. We are certainly pleased with the continuing, broad- based growth in our medical business in what is traditionally our weakest quarter of the year. We also believe that this quarter's sales reflect the establishment of more predictable and growing sales of security imaging equipment. "Unfortunately, the Company did not realize the full benefit of this revenue increase because of several factors, including reduced margins related to customer-funded engineering projects and increased sales and marketing expenses due primarily to the costs associated with our ANEXA subsidiary, which was established in November 2003 to sell digital imaging equipment to end users in select markets. We also experienced increased administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. because of unforeseen expenses related to recent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with L-3 and to the Company's in-depth review of the software revenue recognition procedures followed by our Camtronics Medical Systems subsidiary." Wood noted that research and product development costs were down $1,400,000 from the prior year's first quarter, primarily as a result of existing engineering resources being reallocated to revenue-generating engineering projects, mostly in security. Analogic An`a`log´ic a. 1. Of or belonging to analogy. is working under a TSA TSA See tax-sheltered annuity (TSA). grant to design and develop prototypes of performance enhancements for Explosives Detection Systems (EDSs) already deployed in airports across the country. This field-installable system upgrade is targeted for certification testing and initial production over the course of the next twelve months. Under a second TSA grant, the Company is developing a new generation of innovative EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. systems for checked luggage LUGGAGE. Such things as are carried by a traveller, generally for his personal accommodation; baggage. In England this word is generally used in the same sense that baggage is used in the United States. See Baggage. that could be deployed over the next two to five years. Work is also progressing under a TSA cooperative agreement to develop revolutionary technologies into deployable systems to provide significantly enhanced automatic threat-detection and discrimination capabilities for scanning checked luggage carried on aircraft. In addition to these three government-funded programs, the Company continues work on its innovative COBRA cobra, name for African and Asian snakes of the family Elapidae that are equipped with inflatable neck hoods. The family also includes the African mambas, the Asian kraits, the New World coral snakes and a large number of Australian snakes. system, a compact, CT-based, automatic threat detection system to examine carry-on baggage for aircraft as well as carry-in items for public buildings such as courthouses, embassies, and corporate offices. Developed independently by Analogic in anticipation of evolving security needs, the COBRA is tentatively ten·ta·tive adj. 1. Not fully worked out, concluded, or agreed on; provisional: tentative plans. 2. Uncertain; hesitant. scheduled for a field trial in a major airport by the TSA in the near future. Analogic is also developing a number of major new medical products, including new medical CT systems for evolving niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. . At PhotoDetection Systems work continues on a new Positron Emission Tomography positron emission tomography: see PET scan. positron emission tomography (PET) Imaging technique used in diagnosis and biomedical research. (PET) system that employs innovative detector detector: see particle detector. technology and can be combined with a CT for a new generation of hybrid PET/CTs. New Digital Radiography digital radiography Imaging A format for producing x-rays in which film used to produce conventional x-ray images is replaced with more sensitive sensitive electronics; DXRs produce images with1⁄2 (DR) systems and new generations of high-performance subsystems for multi-slice CT, Magnetic Resonance Imaging (MRI), and DR are in development. The Company is also working on advanced ultrasound transducers and the next generation of clinical ultrasound systems, as well as a unique ultrasound mammography mammography, diagnostic procedure that uses low-dose X rays to detect abnormalities in the breasts. The early diagnosis of breast cancer made possible by the routine use of mammography for screening women increases a woman's treatment alternatives and improves her system. Wood observed that the Company considerably strengthened its leadership team during the quarter. "In September we brought Michael Brock brock n. Chiefly British A badger. [Middle English brok, from Old English broc, of Celtic origin.] on board as Managing Director for B-K Medical, and Peter Harris Peter Harris may refer to:
vol·u·met·ric adj. Of or relating to measurement by volume. imaging modalities Modalities The factors and circumstances that cause a patient's symptoms to improve or worsen, including weather, time of day, effects of food, and similar factors. such as CT, PET, and MRI. Overall, I think we have further strengthened a management team that is sharply focused on our near- term success and future growth." Wood concluded, "The continuing growth in our medical business over the past year or so is most gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. . It suggests that we have additional opportunities for continued growth in the medical sector, while we concurrently work on four major security projects. We believe that we are on course to substantially enhance our opportunities for long-term growth as The World Resource for Health and Security Technology." The restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. for the first quarter of fiscal 2004 was required due to the incorrect application of software revenue recognition procedures with respect to certain Camtronics transactions. Under software revenue recognition rules, Camtronics is not permitted to recognize revenue on a multiple-element software arrangement until such time as Camtronics has delivered or performed all elements of the arrangement or has sufficient evidence of fair value for each undelivered undelivered adj → no entregado al destinatario; if undelivered return to sender → en caso de no llegar a su destino devolver al, remitente undelivered or non-performed element of the arrangement. In the majority of the transactions underlying the restatement, Camtronics has delivered and the customer has paid for the software. However, Camtronics is prohibited pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. from recognizing any revenue from the transaction because some element of the transaction -- such as the delivery of a software upgrade or the performance of customization services -- has not been delivered or performed or sufficient evidence of fair value for those elements cannot be determined. Analogic believes that all the Camtronics transactions in question represent bona fide [Latin, In good faith.] Honest; genuine; actual; authentic; acting without the intention of defrauding. A bona fide purchaser is one who purchases property for a valuable consideration that is inducement for entering into a contract and without suspicion of being customer sales, and that the revenue that has been reversed as part of these restatements will be recognized in future fiscal periods. The fiscal 2004 first quarter restatement also includes a restatement of revenue recognized by the Company during the quarter with respect to the Company's affiliate Shenzhen Anke High-Tech, Ltd. ("SAHCO"). During the first quarter of fiscal 2004 the Company recorded engineering revenue of $2.8 million in connection with a license of intellectual property to SAHCO. The agreement between the Company and SAHCO provided for extended payment terms requiring SAHCO to make an initial payment of $500,000 with the balance due over the following twelve months. Upon further review of the agreement and applicable accounting standards, the Company determined that this license revenue should not have been recorded in its entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. at the date of the contract but as payments were received from SAHCO. The Company received payments of $750,000 from SAHCO in both the quarter ended October 31, 2003, and the quarter ended October 31, 2004. The financial statements set forth below depicts the effects of the combined restatement on selected Income Statement and Balance Sheet items:
THREE MONTHS ENDED OCT. 31, 2003
As Reported As Restated Change
INCOME STATEMENT
Net Revenues $74,969 $71,709 ($3,260)
Income Before Income Taxes $789 ($1,779) ($2,568)
Net Income $631 ($1,601) ($2,232)
Diluted Earnings Per Share $0.05 ($0.12) ($0.17)
BALANCE SHEET
Deferred Cost
(Current & Long Term) $17,017 $18,620 $1,603
Deferred Revenue
(Current & Long Term) $31,603 $33,931 $2,328
Stockholders' Equity $358,515 $355,968 ($2,547)
Total Assets/Total Liabilities $454,934 $454,882 ($52)
Analogic will conduct an investor conference call on Monday, January 31, 2005, at 4:00 p.m. ET to discuss the restated fourth-quarter and fiscal year 2004 results and recent developments. To participate in the conference call, dial 1-888-282-6043 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 Monday, February 14. A telephone digital replay will be available approximately two hours after the call is completed through Wednesday, February 2. To access the digital replay, dial 1-800-642-1687. The conference ID number is 3720630. For more information on the conference call, visit www.analogic.com, call 978-977-3000, x. 3213, or email proberts@analogic.com. Analogic Corporation is a leading designer and manufacturer of advanced health and security systems and subsystems sold 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, Cardiovascular Information Management, 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 January 31, 2005. 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 January 31, 2005.
ANALOGIC CORPORATION
Condensed Consolidated Statements of Operations
(in thousands, except share data) (Unaudited)
Three Months Ended
October 31,
(Restated)
2004 2003
--------------- -------------
Net Revenue:
Product $76,086 $62,677
Engineering 5,240 6,596
Other 2,765 2,436
Total net revenue $84,091 $71,709
Cost of sales:
Product 47,139 38,675
Engineering 4,062 2,804
Other 1,438 1,209
Total cost of sales 52,639 42,688
Gross margin 31,452 29,021
Operating expenses:
Research and product development 13,937 15,303
Selling and marketing 8,887 8,024
General and administrative 9,993 8,473
Total operating expenses 32,817 31,800
Loss from operations (1,365) (2,779)
Other (income) expense:
Interest income (856) (1,124)
Interest expense 16 73
Equity in unconsolidated affiliates (117) 157
Other (592) (106)
Total other (income) expense (1,549) (1,000)
Income (loss) before income taxes 184 (1,779)
Provision for income taxes 19 (178)
Net income (loss) $165 $(1,601)
Earnings per common share:
Basic $0.01 $(0.12)
Diluted $0.01 $(0.12)
Dividends declared per share $0.08 $ 0.08
Shares outstanding:
Basic 13,521 13,381
Diluted 13,546 13,547
Condensed Consolidated Balance Sheets
(in thousands)
October 31, July 31,
2004 2004
(Unaudited) (Audited)
Assets:
Cash, cash equivalents and marketable
securities $193,777 $176,637
Accounts and notes receivable, net 49,562 55,498
Inventories 67,103 65,952
Other current assets 31,551 30,034
Total current assets 341,993 328,121
Property, plant and equipment, net 92,609 91,077
Other assets 33,301 32,873
Total Assets $467,903 $452,071
Liabilities and Stockholders' Equity:
Mortgage and other notes payable $222 $962
Accounts payable 24,310 21,707
Accrued liabilities 21,912 21,380
Advance payments and deferred revenue 41,690 32,406
Accrued income taxes 5,894 5,791
Accrued dividends 1,095 0
Total current liabilities 95,123 82,246
Obligations under capital lease 119 155
Deferred income taxes 2,190 810
Deferred revenue 1,459 1,459
Total long term liabilities 3,768 2,424
Stockholders' Equity 369,012 367,401
Total Liabilities and Stockholders'
Equity $467,903 $452,071
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