Analogic Spins Off Computer Telephony Group into Anatel Communications Corporation.

Business/Technology Editors

PEABODY, Mass.--(BUSINESS WIRE)--March 27, 2000

Analogic Corporation (NASDAQ: ALOG) of Peabody, Massachusetts announced today that it has spun off its Communications Products (Computer Telephony) Group into a new subsidiary, Anatel Communications Corporation. Analogic Chairman and CEO Bernard M. Gordon explained that the intent is to better exploit the opportunities inherent in the explosive growth of Voice over Internet Protocol (VoIP) and Media Gateways in the Internet Telecommunications market.

Thomas Miller, President and COO of Analogic, stated that the separation of the telephony group from the core business is an integral part of the strategic plan articulated at the annual shareholders meeting in January. "We designed the first known commercially available DSP resource card for VoIP in 1995, the TAP-801, and believe we have achieved an enviable technological and business position in this market. To take full advantage of this extremely dynamic business environment, however, requires a different level of capitalization. We are, therefore, establishing Anatel Communications with the intent to take it public within the year."

"As the market for Voice over IP grows at over 80% per year, the demand for low-cost, high-port count systems is increasing exponentially. Anatel Communications appears to be in a unique position to satisfy industry demand," explained Chappell Cory, who was appointed President of the newly formed subsidiary. "Our expanding customer base includes market leaders such as Lucent, ECI Telecom and Net2Phone. We are aggressively increasing our investments in engineering, sales and marketing and will increase our product offerings in Media Gateways while expanding our core VoIP board business, based on the well-known TAP-800 product family. We expect that the initial public offering intended for later this year will enable our new company to fully exploit its technological leadership in this explosive field."

Anatel Communications, an Analogic Company, designs, manufactures, and markets CompactPCI, PCI and ISA Voice over Internet Protocol (VoIP) DSP resource boards; T1/E1 and DS-3 network access boards; Media Gateway development systems; and associated software for Windows NT, Solaris, VxWorks, UNIXWare, and Linux for the Internet Telecommunications market. Applications include Media Gateways, Softswitch architectures, voice routers (PBXs) and Call Center systems. For more information on Anatel Communications, visit www.anatel.net or email [e-mail].

Analogic Corporation is a leading custom designer and manufacturer of advanced systems and subsystems sold to major medical, industrial and telecommunications Original Equipment Manufacturers (OEMs). The Company is recognized worldwide for advancing the state of the art in Computed Tomography (CT), Magnetic Resonance Imaging (MRI), Ultrasound, Patient Monitoring, Analog-to-Digital (A/D) Conversion, Digital Imaging, Computer Telephony, and Test & Measurement Applications.

This news release contains forward-looking statements regarding future events or financial performance of Anatel and/or Analogic that involve risks and uncertainties. Certain risks and uncertainties, such as competition, are discussed in the risk factors section of Analogic's Form 10K for the year ended July 31, 1999, which factors are incorporated herein by reference. Copies of this document are available on request from the Investor Relations Department of Analogic Corporation.