Analogic Corporation Restates Revenues and Earnings for Its Fourth Quarter and Fiscal Year Ended July 31, 2004, and for Fiscal Years 2002 and 2003.PEABODY Peabody (pē`bədē, –bädē), city (1990 pop. 47,039), Essex co., NE Mass., a suburb of Boston, on the Danvers River; settled c.1633, inc. as South Danvers 1855, name changed 1868. , Mass. -- In the eighth paragraph, second sentence, the figure for engineering revenue should read: $2,800,000 (sted $2,8000,000) The corrected release reads: 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. RESTATES REVENUES AND EARNINGS FOR ITS FOURTH QUARTER AND FISCAL YEAR ENDED JULY July: see month. 31, 2004, AND FOR FISCAL YEARS 2002 AND 2003 Analogic Corporation (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, today is reporting restated revenues and earnings for its fourth quarter and fiscal year ended July 31, 2004, and its fiscal years ended July 31, 2002 and 2003. On September September: see month. 22, 2004, the Company had issued a fourth quarter and fiscal year 2004 earnings release. This release supersedes the September 22 release. Investors should not rely on that earnings release or any other previously issued earnings releases for fiscal 2004, 2003, or 2002. All numbers set forth in this release have been restated. Revenues for the fourth quarter ended July 31, 2004, were $102,235,000, compared with the prior year's fourth-quarter revenues of $81,656,000, an increase of $20,579,000 or 25%. Net income for the fourth quarter was $3,904,000, or $.29 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, compared with $1,674,000, or $.11 per diluted share, for the prior year's fourth quarter. The improvement was due to a modest increase in the Company's security systems sales and general growth in the sales of medical imaging equipment, including 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. subsystems, 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, 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 systems, and patient monitoring systems. Revenues for the fiscal year ended July 31, 2004, were $355,557,000, compared with the prior year's record revenues of $471,697,000, a decrease of $116,140,000, or 25%. Net income for the fiscal year was $8,354,000, or $.62 per diluted share, compared with $49,531,000, or $3.70 per diluted share, for the same period a year ago, a decrease of $41,177,000. On October October: see month. 14, 2004, the Company stated in a news release that in the course of preparing its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , the Company further evaluated certain information leading it to question whether appropriate revenue recognition procedures had been followed in all cases by its Camtronics Medical Systems ("Camtronics") subsidiary, a supplier of advanced cardiac information management systems. As a result, the Company conducted an additional review of certain Camtronics transactions and the revenue recognition procedures followed, which led to a delay in completing the preparation and audit of its financial statements for the fiscal year ended July 31, 2004. On December December: see month. 13, 2004, Analogic An`a`log´ic a. 1. Of or belonging to analogy. announced that, as a result of its review of customer transactions and revenue recognition procedures followed by Camtronics, the Company would revise previously announced operating results for the fiscal year ended July 31, 2004 and restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements for each of the first three quarters of fiscal 2004. As announced in a news release dated January January: see month. 14, 2005, Analogic is also restating its financial statements for the fiscal years ended July 31, 2002 and 2003, and each of the interim periods within these fiscal years to reflect the appropriate accounting treatment for certain Camtronics transactions that have been under review. Analogic will file amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. reports with the U.S. Securities and Exchange Commission (SEC) containing the necessary restatements of its historical financial statements for fiscal 2002 and 2003 and the first three quarters of fiscal 2004 as promptly as possible. The restatements for fiscal 2002 and 2003, and in large part for fiscal 2004, are 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 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. , 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. Fiscal 2004 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 $2,800,000 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 remaining 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. As of July 31, 2004, the Company had received $1,750,000 in payments from SAHCO. During the first quarter ended October 31, 2004, the Company received an additional $750,000 in payments. The financial statements set forth below depicts the effects of the combined restatement on selected Income Statement and Balance Sheet items:
Fourth
Fiscal Years Ended Quarter
Ended
31-Jul-02 31-Jul-03 31-Jul-04 31-Jul-04
INCOME STATEMENTS
Net Revenues
As Reported $306,126 $471,522 $370,766 $108,278
As Restated $304,858 $471,697 $355,557 $102,235
Net Increase (Decrease) $ (1,268) $ 175 $(15,209) $ (6,043)
Income Before Income Taxes
As Reported $3,781 $77,675 $16,610 $ 6,664
As Restated $3,261 $77,757 $10,101 $ 4,297
Net Increase (Decrease) $ (520) $82 $(6,509) $(2,367)
Net Income
As Reported $3,006 $49,495 $11,630 $4,370
As Restated $2,655 $49,531 $ 8,354 $3,904
Net Increase (Decrease) $ (351) $ 36 $(3,276) $ (466)
Diluted Earnings Per Share
As Reported $ 0.23 $ 3.70 $ 0.86 $ 0.32
As Restated $ 0.20 $ 3.70 $ 0.62 $ 0.29
Net Increase (Decrease) $(0.03) $ 0.00 $ (0.24) $(0.03)
BALANCE SHEETS
Deferred Cost (Current & Long Term)
As Reported $10,814 $15,002 $ 3,293 $ 3,293
As Restated $11,667 $15,879 $12,942 $12,942
Net Increase (Decrease) $ 853 $ 877 $ 9,649 $ 9,649
Deferred Revenue (Current & Long Term)
As Reported $20,850 $31,827 $12,689 $12,689
As Restated $22,118 $32,920 $27,740 $27,740
Net Increase (Decrease) $ 1,268 $ 1,093 $15,051 $15,051
Stockholders' Equity
As Reported $302,351 $356,513 $370,992 $370,992
As Restated $302,000 $356,198 $367,401 $367,401
Net Increase (Decrease) $ (351) $ (315) $ (3,591) $ (3,591)
Total Assets/Total Liabilities
and Stockholders' Equity
As Reported $437,590 $456,375 $440,927 $440,927
As Restated $438,639 $457,417 $452,071 $452,071
Net Increase (Decrease) $ 1,049 $ 1,042 $ 11,144 $ 11,144
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. noted, "The decreases in revenue and income from year to year were consistent with what we had expected. Last year we reported record revenue and net income due to extraordinary shipments of EXplosive Assessment Computed Tomography (EXACT(TM)) systems for use in certified See certification. Explosive Detection Systems Noun 1. explosive detection system - a rapid automatic system to detect plastic explosives in passengers' luggage using X-ray technology and computers; designed for use in airports EDS (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. ) that screen 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. for aircraft. We shipped a record 446 EXACT systems to L-3 Communications
L-3 Communications Holdings, Inc. (NYSE: LLL) is a company that supplies command, control, communications, intelligence, surveillance and reconnaissance (C3ISR) systems and last year to help airports comply with the mandates of the Aviation and Transportation Security Act The Aviation and Transportation Security Act (ATSA, Pub.L. 107-71 November 19, 2001) was enacted by the 107th United States Congress in the immediate aftermath of the September 11, 2001 attacks. of 2001. During Fiscal 2004, only 40 EXACT systems were shipped, resulting in a year-over-year revenue decrease of approximately $173,000,000. That decrease was partially offset by a 21% growth in our medical business. We experienced solid growth in the sales of ultrasound systems and subsystems, CT subsystems, digital radiography systems, patient and fetal monitors Noun 1. fetal monitor - an electronic monitor that monitors fetal heartbeat and the mother's uterine contractions during childbirth electronic fetal monitor, electronic foetal monitor, foetal monitor , and embedded Inserted into. See embedded system. signal-processing systems. "We believe that we are establishing a broader foundation for long- term growth. The sale of over 400 EXACT units in fiscal 2003 was seen by many as a short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. , one-time benefit for Analogic. We saw this windfall windfall An unexpected profit or gain. An investor holding a stock that increases greatly in price because of an unexpected takeover offer receives a windfall. in revenue and profit as an opportunity to increase our investment in our next-generation medical technology and to establish a leadership position in the development of advanced security systems." In Fiscal 2003, the Company began designing and developing the 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. , an innovative, 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. In January 2004 a COBRA prototype was tested with real weapons and explosives in the Transportation Security Administration (TSA TSA See tax-sheltered annuity (TSA). ) laboratory, where the system performed beyond expectations. We expect the TSA to place a COBRA system in a major airport in the very near future for a field trial, and believe that the TSA will shortly establish performance requirements for the next generation of carry- on screening devices. We hope to be able to submit the COBRA for certification testing during the first half of fiscal 2006. During fiscal 2004, Analogic entered into an agreement with a leading prime contractor to design and develop prototypes of continuous performance enhancements for EDS systems already deployed in airports across the country, a program funded by a grant from the TSA. Those enhancements are targeted for certification testing and initial production over the course of the next twelve months. The Company separately received an award from the TSA to design the next generation of innovative explosive detection systems for checked luggage that could be deployed over the next two to five years. After fiscal year end, the TSA awarded the Company a cooperative agreement in support of its Manhattan II project. Manhattan II is a TSA program that seeks to identify and support the development of revolutionary technologies into deployable systems that will provide significantly enhanced automatic threat-detection and discrimination capabilities for scanning checked luggage carried on aircraft and in other applications. Wood noted that the award was a strong testament to the Company's past and current programs with the TSA. "It is a clear indication that the agency believes in our engineering capabilities and technological leadership, and it further validates our role as an important resource for them," said Wood. In fiscal 2004 the Company continued to invest in higher levels of research and development in a number of medical areas as well. Analogic is developing 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. , and work continues at PhotoDetection Systems 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 (DR) systems are being developed for ANEXA, the digital imaging subsidiary established early in the fiscal year. Work is also continuing on a number of advances in high-performance subsystems for multi-slice CT, 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. ), and DR, including extremely low- noise detector plates. The Company is continuing to develop a number of advanced ultrasound transducers and is working on 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 that could eliminate the need for many breast biopsies Breast Biopsy Definition A breast biopsy is removal of breast tissue for examination by a pathologist. This can be accomplished surgically, or by withdrawing tissue through a needle. . Wood concluded, "We are pleased with what we have accomplished to date in growing our medical business and believe that the steps we have taken in the past year will substantially enhance our opportunities for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth as The World Resource for Health and Security Technology." 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. 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 cardiovascular /car·dio·vas·cu·lar/ (-vas´ku-ler) pertaining to the heart and blood vessels. car·di·o·vas·cu·lar adj. Abbr. Information Management, 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 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 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. 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)
Three Months Ended Twelve Months Ended
July 31, July 31,
-------------------------------------------
(Restated--Unaudited) (Restated)
2004 2003 2004 2003
-------------------------------------------
Net Revenue:
Product $94,983 $75,278 $327,129 $442,431
Engineering 4,752 4,052 20,081 20,856
Other 2,500 2,326 8,347 8,410
-------- ------- -------- --------
Total net revenue 102,235 81,656 355,557 471,697
-------- ------- -------- --------
Cost of sales:
Product 57,366 43,863 195,920 256,294
Engineering 5,048 2,692 13,487 14,897
Other 1,358 1,278 4,863 4,738
-------- ------- -------- --------
Total cost of sales 63,772 47,833 214,270 275,929
-------- ------- -------- --------
Gross margin 38,463 33,823 141,287 195,768
-------- ------- -------- --------
Operating expenses:
Research and product
development 14,804 14,560 58,673 55,099
Selling and marketing 9,654 9,472 37,025 34,866
General and administrative 10,313 10,467 39,200 34,971
-------- ------- -------- --------
Total operating expenses 34,771 34,499 134,898 124,936
-------- ------- -------- --------
Income (loss) from operations 3,692 (676) 6,389 70,832
-------- ------- -------- --------
Other (income) expense:
Interest income (840) (1,224) (3,669) (5,035)
Interest expense 41 120 294 360
Equity in unconsolidated
affiliates 271 958 (577) 3,506
Other (77) (3,017) 240 (5,756)
-------- ------- -------- --------
Total other (income) expense (605) (3,163) (3,712) (6,925)
-------- ------- -------- --------
Income before income taxes 4,297 2,487 10,101 77,757
Provision for income taxes 393 813 1,747 28,226
-------- ------- -------- --------
Net income 3,904 $1,674 $8,354 $49,531
======== ======= ======== ========
Earnings per common share:
Basic $0.29 $0.12 $0.62 $3.74
Diluted $0.29 $0.11 $0.62 $3.70
Dividends declared per share $0.08 $0.08 $0.32 $0.32
Shares outstanding:
Basic 13,569 13,326 13,463 13,251
Diluted 13,561 13,523 13,519 13,394
Condensed Consolidated Balance Sheets
(in thousands)
July 31, July 31,
2004 2003
-------- --------
(Restated) (Restated)
Assets:
Cash, cash equivalents and marketable
securities $176,637 $177,961
Accounts and notes receivable, net 55,498 53,875
Inventories 65,952 69,548
Other current assets 30,034 34,519
-------- --------
Total current assets 328,121 335,903
Property, plant and equipment, net 91,077 83,926
Other assets 32,873 37,588
-------- --------
Total Assets $452,071 $457,417
======== ========
Liabilities and Stockholders' Equity:
Mortgage and other notes payable $ 962 $ 1,457
Accounts payable 21,707 21,384
Accrued liabilities 21,380 24,412
Advance payments and deferred revenue 32,406 36,430
Accrued income taxes 5,791 5,909
-------- --------
Total current liabilities 82,246 89,592
Long-term debt 155 4,164
Deferred income taxes 810 5,175
Deferred revenue 1,459 2,288
-------- --------
Total long term liabilities $2,424 $11,627
Stockholders' Equity 367,401 356,198
-------- --------
Total Liabilities and Stockholders' Equity $452,071 $457,417
======== ========
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