<PAGE>1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-6715
ANALOGIC CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2454372
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 Centennial Drive, Peabody, Massachusetts 01960
(Address of principal executive offices) (Zip Code)
(508) 977-3000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
The number of shares of Common Stock outstanding at October 31, 1994 was
12,352,712
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ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX
Page
No.
Part I Financial Information
Consolidated Condensed Balance Sheets
October 31, 1994 and July 31, 1994 3
Consolidated Condensed Statements of Income
Three Months Ended October 31, 1994 and 1993 4
Consolidated Condensed Statements of Cash Flows
Three Months Ended October 31, 1994 and 1993 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 8
Part II Other Information 9 - 10
Index to Exhibits 11
Exhibit 11 - Calculation of Earnings per Share 12
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<PAGE>3
PART I FINANCIAL INFORMATION
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000 omitted)
October 31, July 31,*
1994 1994
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 20,352 $ 23,571
Marketable securities, at market 75,818 70,825
Accounts and notes receivable, net 36,534 35,639
Inventories 44,902 41,169
Prepaid expenses and other current assets 5,526 5,536
Total current assets 183,132 176,740
Property, plant and equipment, net 48,442 47,931
Investments in and advances to affiliated companies 6,450 7,977
Excess of cost over acquired net assets,
net of accumulated amortization 1,250 1,347
Other assets, including unamortized software
costs ($5,460 and $5,244) 5,836 5,625
$245,110 $239,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage and other notes payable $ 2,069 $ 1,975
Obligations under capital leases 360 357
Accounts payable, trade 9,477 7,568
Accrued employee compensation and benefits 6,992 8,639
Accrued expenses 6,779 6,298
Accrued income taxes 2,124 1,332
Total current liabilities 27,801 26,169
Long-term debt:
Mortgage and other notes payable 7,175 7,381
Obligations under capital leases 3,518 3,612
Deferred income taxes 4,117 4,128
Minority interest in subsidiaries 11,963 12,120
Excess of acquired net assets over cost, net
of accumulated amortization 1,686 1,819
Stockholders' equity:
Common stock, $.05 par 681 680
Capital in excess of par value 20,057 19,911
Retained earnings 183,696 180,222
Unrealized holding gains and losses 11
Cumulative translation adjustments 1,444 558
Treasury stock, at cost (14,346) (14,233)
Unearned compensation (2,693) (2,747)
188,850 184,391
$245,110 $239,620
* See note 2 of notes to consolidated condensed financial statements for
further information.
The accompanying notes are an integral part of these financial statements.
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ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(000 omitted, except per share data)
Three Months Ended
October 31,
Revenues: 1994 1993
Product and service, net $45,015 $41,288
Engineering and licensing 1,688 869
Other operating revenue 3,006 2,764
Interest and dividend income 1,222 1,184
Total revenues 50,931 46,105
Costs and expenses:
Cost of sales:
Product and service 25,140 21,037
Engineering and licensing 598 861
Other operating expenses 1,447 1,467
General and administrative 4,493 3,991
Selling 7,308 7,050
Research and product development 7,569 6,585
Interest expense 240 301
Amortization of excess of acquired
net assets over cost (133) (114)
Amortization of excess of cost
over acquired net assets 97 97
Total cost of sales and expenses 46,759 41,275
Income from operations 4,172 4,830
Equity in net income of
unconsolidated affiliates 65
Income before income taxes 4,172 4,895
Provision for income taxes 855 1,575
Minority interest in net income (loss)
of consolidated subsidiaries (157) 119
Net income $ 3,474 $ 3,201
Average common and common
equivalent shares outstanding 12,441 12,456
Earnings per common and common
equivalent share $0.28 $0.26
Dividends per share NONE NONE
The accompanying notes are an integral part of these financial statements.
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ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(000 omitted)
Three Months Ended
October 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 1994 1993
Net income $ 3,474 $ 3,201
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,612 1,708
Amortization of capitalized software 581 401
Amortization of excess of cost over
acquired net assets 97 97
Amortization of excess of acquired net
assets over cost (133) (114)
Minority interest in net income of
consolidated subsidiaries (157) 119
Compensation from stock grants 177 185
Gain on sale of building
Gain sale of equipment (8)
Changes in operating assets and liabilities
Decrease (increase) in assets:
Accounts and notes receivable (895) 269
Inventories (3,733) (2,432)
Prepaid expenses and other current assets (90) (368)
Other assets 6
Increase (decrease) in liabilities:
Accounts payable, trade 1,909 (308)
Accrued expenses and other current liabilities (1,166) (2,342)
Accrued and deferred income taxes 881 1,263
TOTAL ADJUSTMENTS (919) (1,522)
NET CASH PROVIDED BY OPERATING ACTIVITIES 2,555 1,679
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in and advances to affiliated companies (825)
Additions to property, plant and equipment (2,123) (2,952)
Capitalized software (798) (350)
Purchases of marketable securities (7,415) (3,300)
Maturities of marketable securities 3,960 2,400
Proceeds from sale of building
Proceeds from sale of property, plant and equipment 8
NET CASH USED BY INVESTING ACTIVITIES (6,368) (5,027)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt and capital lease obligations (202) (302)
Purchase of common stock for treasury (113)
Purchase of common stock of majority owned subsidiary (201)
Issuance of common stock pursuant to stock options
and employee stock purchase plan 23 98
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (292) (405)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 886
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,219) (3,753)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23,571 20,482
CASH AND CASH EQUIVALENTS, END OF PERIOD $20,352 $16,729
The accompanying notes are an integral part of these financial statements.
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ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting
solely of normal recurring adjustments) necessary to fairly present
Analogic Corporation's financial position as of October 31, 1994 and
July 31, 1994, the results of its operations for the three months ended
October 31, 1994 and 1993 and statements of cash flows for the three
months then ended. The results of the operations for the three months
ended October 31, 1994 are not necessarily indicative of the results to
be expected for the fiscal year ending July 31, 1995.
The accounting policies followed by the Company are set forth in Note 1
to the Company's financial statements in its Annual Report on Form 10-K
for the fiscal year ended July 31, 1994.
2. Financial statements, with the exception of the July 31, 1994 balance
sheet, are unaudited and have not been examined by independent certified
public accountants. The consolidated balance sheet as of July 31, 1994
contains data derived from audited financial statements.
3. The inventories as of October 31, 1994 were not based on a physical or
perpetual inventory but were calculated on the basis of an estimated
percentage of material used during the period. The components of
inventory are estimated as follows:
October 31, July 31,
1994 1994
Raw materials $17,822,000 $16,711,000
Work-in-process 16,643,000 14,982,000
Finished goods 10,437,000 9,476,000
$44,902,000 $41,169,000
4. Interest paid, net of amount capitalized, amounted to $215,000 and
$262,000 during the three months ended October 31, 1994 and 1993,
respectively. Interest expense for the three months ended October 31,
1994 amounted to $240,000.
5. Income taxes paid during the three months ended October 31, 1994 and
1993 amounted to $61,000 and $480,000, respectively.
6. Effective August 1, 1994 the Company adopted the Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS. No. 115").
The Company's marketable securities have been categorized as available -
for - sale securities, as defined by SFAS No. 115, and are reflected on
the balance sheet at fair value. The net unrealized holding gains and
losses are reflected in a separate component of stockholders' equity
until realized. The aggregate fair value of the securities is
$75,818,000 and the aggregate cost value is $75,807,000. Temporary
gross unrealized holding gains amounted to approximately $1,983,000 and
losses amounted to approximately $1,972,000 resulting in a net gain of
$11,000.
The majority of these securities mature or have put dates within a five
year period. There were no gains or losses on sales of these securities
during the quarter ended October 31, 1994.
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<PAGE>7
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's balance sheet at October 31, 1994 reflects a current ratio of
6.6 to 1 compared to 6.8 to 1 at July 31, 1994. Cash, cash equivalents and
marketable securities, along with accounts and notes receivable, constitute
approximately 72% of current assets at October 31, 1994. Liquidity is
sustained principally through funds provided from operations, with short-term
time deposits and marketable securities available to provide additional
sources of cash. The Company places its cash investments in high credit
quality financial instruments and, by policy, limits the amount of credit
exposure to any one financial institution. Management does not anticipate
any difficulties in financing operations at anticipated levels. The
Company's debt to equity ratio was 0.30 to 1 at October 31, 1994 and
July 31, 1994, respectively.
Capital expenditures totaled approximately $2,123,000 during the three months
ended October 31, 1994.
RESULTS OF OPERATIONS
Three Months Fiscal 1995 (10/31/94) vs. Three Months Fiscal 1994 (10/31/93)
Product, service, engineering and licensing revenues for the three months
ended October 31, 1994 were $46,703,000 as compared to $42,157,000 for the
same period last year. The increase of $4,546,000 was principally due to an
increase in sales of Medical Technology Products of $6,355,000 offset by
decreased sales of Signal Processing Technology Products of $210,000 and
Industrial Technology Products of $1,599,000. Other operating revenue of
$3,006,000 and $2,764,000 represents revenue from the Hotel operation for the
three months ending October 31, 1994 and 1993, respectively.
The percentage of total cost of sales to total net sales for the three months
of fiscal 1995 and fiscal 1994 were 55% and 52%, respectively. The increase
was primarily due to higher direct material costs. Operating costs
associated with the Hotel during the three months of fiscal 1995 and 1994
were $1,447,000 and $1,467,000, respectively.
General and administrative and selling expenses increased $760,000
primarily due to an increase in payroll related costs and an increase in the
level of sales activity. Research and product development expenses increased
$984,000 primarily due to the addition of staff supporting new medical
technology product development programs.
Computer software costs of $749,000 and $350,000 were capitalized in the
three months of fiscal 1995 and 1994, respectively. Amortization of
capitalized software amounted to $581,000 and $401,000 in the first three
months of fiscal 1995 and 1994, respectively.
The Company's share of equity in losses of a privately-held company located
in Canada includes a charge of $435,000 during the first quarter of fiscal
1994.
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ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three Months Fiscal 1995 (10/31/94) vs. Three Months Fiscal 1994 (10/31/93)
(continued)
During the first quarter of fiscal 1994, the Company's investment in Analogic
Scientific was increased by $500,000 reflecting the Company's share of
Analogic Scientific's income.
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, for the three months ended October 31, 1994 and 1993 amounted to
$288,000 and $266,000, respectively.
Minority interest in the net loss of B&K for the three months ended October
31, 1994 and 1993 amounted to $445,000 and $32,000, respectively. Minority
interest in the net loss of a domestic subsidiary for the three months ended
October 31, 1993 was $115,000.
The effective tax rate for the three months of fiscal 1995 was 21% vs. 32%
for the three months of fiscal 1994. The decrease was primarily due to the
utilization of research and experimental tax credits and alternative minimum
tax credits.
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ANALOGIC CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. 11 - Calculation of earnings per share.
Exhibit NO. 27 - Financial Data Schedule.
(b) During the quarter ended October 31, 1994, the Company did not file any
reports on form 8-K.
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ANALOGIC CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANALOGIC CORPORATION
Registrant
Date December 5, 1994 /s/ Bernard M. Gordon
Bernard M. Gordon
President
Date December 5, 1994 /s/ John A. Tarello
John A. Tarello
Senior Vice President
(Chief Accounting Officer)
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<PAGE>11
ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No. Page No.
11 Calculation of Earnings per Share 12
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<PAGE>12
EXHIBIT 11
ANALOGIC CORPORATION AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
Net earnings per share are computed using the average number of shares
actually outstanding plus the incremental shares computed on the assumption
that certain lower priced stock options had been exercised with the proceeds
utilized to purchase treasury stock.
Three Months Ended
October 31,
1994 1993
PRIMARY:
Net Income $3,474,000 $3,201,000
Average shares outstanding 12,349,234 12,366,916
Add: Incremental shares to
reflect dilutive stock
options deemed common
stock equivalents.
(Computed by treasury
stock method.) 92,172 88,631
Common and common equivalent
shares outstanding 12,441,406 12,455,547
Earnings per share $.28 $.26
ASSUMING FULL DILUTION:
Net Income $3,474,000 $3,201,000
Average shares outstanding 12,349,234 12,366,916
Add: Incremental shares due to
the effect of common stock
equivalents - this assumes
that proceeds from shares
sold under dilutive stock
options (using quarter end
market price to determine
proceeds where such price
was in excess of average
quarterly prices) were
used to purchase treasury
stock. 103,955 99,496
Average common shares
outstanding 12,453,189 12,466,412
Earnings per share $.28 $.26
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ANALOGIC CORPORATION
8 CENTENNIAL DRIVE
PEABODY, MASSACHUSETTS 01960
December 9, 1994
SEC Operations center
Attn: Filer Support
Mail Stop 0-7
6432 General Green Way
Alexandria, VA 22312-2413
RE: Analogic Corporation (the "Company")
File No. 0-6715
Dear Sirs:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of Analogic Corporation is the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1994.
This filing is being effected by direct transmission to the Commission's
EDGAR system.
Very truly yours,
ANALOGIC CORPORATION
Michael N. Siraco
Corporate Controller
MNS/wbf
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated balance sheets and consolidated statements of income and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> OCT-31-1994
<CASH> 20352
<SECURITIES> 75818
<RECEIVABLES> 36534
<ALLOWANCES> 1254
<INVENTORY> 44902
<CURRENT-ASSETS> 183132
<PP&E> 126059
<DEPRECIATION> 77616
<TOTAL-ASSETS> 245110
<CURRENT-LIABILITIES> 27801
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 245110
<SALES> 46703
<TOTAL-REVENUES> 50931
<CGS> 25738
<TOTAL-COSTS> 27185
<OTHER-EXPENSES> 19334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 240
<INCOME-PRETAX> 4172
<INCOME-TAX> 855
<INCOME-CONTINUING> 3474
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3474
<EPS-PRIMARY> .28
<EPS-DILUTED> .28
</TABLE>
