<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 January 31, 1995
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 January 31, 1995
was 12,364,154
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ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX
Page
No.
Part I Financial Information
Consolidated Condensed Balance Sheets
January 31, 1995 and July 31, 1994 3
Consolidated Condensed Statements of Income
Three and Six Months Ended January 31, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows
Six Months Ended January 31, 1995 and 1994 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 9
Part II Other Information 10 - 11
Index to Exhibits 12
Exhibit 11 - Calculation of Earnings per Share 13
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<PAGE>3
PART I FINANCIAL INFORMATION
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000 omitted)
January 31, July 31,*
1995 1994
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 18,839 $ 23,571
Marketable securities, at market 80,049 70,825
Accounts and notes receivable, net 38,523 35,639
Inventories 43,467 41,169
Prepaid expenses and other current assets 4,113 5,536
Total current assets 184,991 176,740
Property, plant and equipment, net 49,509 47,931
Investments in and advances to affiliated
companies 6,450 7,977
Excess of cost over acquired net assets,
net of accumulated amortization 1,153 1,347
Other assets, including unamortized software
costs ($5,627 and $5,244) 5,983 5,625
$248,086 $239,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage and other notes payable $ 373 $ 1,975
Obligations under capital leases 370 357
Accounts payable, trade 10,055 7,568
Accrued employee compensation and benefits 8,399 8,639
Accrued expenses 6,416 6,298
Accrued income taxes 1,495 1,332
Total current liabilities 27,108 26,169
Long-term debt:
Mortgage and other notes payable 7,118 7,381
Obligations under capital leases 3,422 3,612
Deferred income taxes 4,107 4,128
Minority interest in subsidiaries 12,405 12,120
Excess of acquired net assets over cost, net
of accumulated amortization 1,553 1,819
Stockholders' equity:
Common stock, $.05 par 681 680
Capital in excess of par value 20,033 19,911
Retained earnings 186,828 180,222
Unrealized holding gains and losses 687
Cumulative translation adjustments 958 558
Treasury stock, at cost (14,304) (14,233)
Unearned compensation (2,510) (2,747)
192,373 184,391
$248,086 $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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<PAGE>4
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(000 omitted, except per share data)
Three Months Ended Six Months Ended
January 31, January 31,
Revenues: 1995 1994 1995 1994
Product and service, net $47,671 $45,796 $92,686 $87,084
Engineering and licensing 1,782 833 3,470 1,702
Other operating revenue 1,794 1,805 4,800 4,569
Interest and dividend income 1,290 1,153 2,512 2,337
Total revenues 52,537 49,587 103,468 95,692
Costs and expenses:
Cost of sales:
Product and service 27,399 23,877 52,539 44,914
Engineering and licensing 687 651 1,285 1,512
Other operating expenses 1,164 1,177 2,611 2,644
General and administrative 3,603 3,972 8,096 7,963
Selling 7,131 7,517 14,439 14,567
Research and product development 7,626 6,822 15,195 13,407
Interest expense 214 311 454 612
Amortization of excess of acquired
net assets over cost (133) (233) (266) (347)
Amortization of excess of cost
over acquired net assets 97 97 194 194
Total cost of sales and
expenses 47,788 44,191 94,547 85,466
Income from operations 4,749 5,396 8,921 10,226
Equity in net income of
unconsolidated affiliates 340 405
Income before income taxes 4,749 5,736 8,921 10,631
Provision for income taxes 1,027 895 1,882 2,470
Minority interest in net income
of consolidated subsidiaries 590 1,079 433 1,198
Net income $ 3,132 $ 3,762 $ 6,606 $ 6,963
Average common and common
equivalent shares outstanding 12,477 12,447 12,459 12,451
Earnings per common and common
equivalent share $0.25 $0.30 $0.53 $0.56
Dividends per share NONE NONE NONE NONE
The accompanying notes are an integral part of these financial
statements.
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<PAGE>5
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(000 omitted)
Six Months Ended
January 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 1995 1994
Net income $ 6,606 $ 6,963
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,173 3,198
Amortization of capitalized software 1,159 801
Amortization of excess of cost over
acquired net assets 194 194
Amortization of excess of acquired net
assets over cost (266) (347)
Minority interest in net income of
consolidated subsidiaries 433 1,198
Compensation from stock grants 360 378
Gain on sale of building
Gain sale of equipment (15) (18)
Changes in operating assets and liabilities
Decrease (increase) in assets:
Accounts and notes receivable (2,884) (2,293)
Inventories (2,298) (3,527)
Prepaid expenses and other current assets 123 497
Other assets (4) (5)
Increase (decrease) in liabilities:
Accounts payable, trade 2,487 (1,284)
Accrued expenses and other current
liabilities (122) (399)
Accrued and deferred income taxes 1,442 (654)
TOTAL ADJUSTMENTS 3,782 (2,261)
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,388 4,702
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in and advances to affiliated
companies (865)
Additions to property, plant and equipment (4,751) (4,271)
Capitalized software (1,513) (700)
Purchases of marketable securities (16,485) (7,200)
Maturities of marketable securities 9,475 7,715
Proceeds from sale of building
Proceeds from sale of property, plant
and equipment 15 22
NET CASH USED BY INVESTING ACTIVITIES (13,259) (5,299)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt and capital lease
obligations (2,042) (445)
Purchase of common stock for treasury (112) (1,237)
Purchase of common stock of majority owned
subsidiary (243) (240)
Issuance of common stock pursuant to stock
options and employee stock purchase plan 136 190
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES (2,261) (1,732)
EFFECT OF EXCHANGE RATE CHANGES ON CASH 400
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,732) (2,329)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23,571 20,482
CASH AND CASH EQUIVALENTS, END OF PERIOD $18,839 $18,153
The accompanying notes are an integral part of these financial
statements.<PAGE>
<PAGE>6
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 January 31, 1995 and July 31, 1994, the results
of its operations for the three and six months ended January 31,
1995 and 1994 and statements of cash flows for the six months
then ended. The results of the operations for the three and six
months ended January 31, 1995 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 January 31, 1995 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:
January 31, July 31,
1995 1994
Raw materials $17,871,000 $16,711,000
Work-in-process 15,299,000 14,982,000
Finished goods 10,297,000 9,476,000
$43,467,000 $41,169,000
4. Interest paid, net of amount capitalized, amounted to $417,000
and $530,000 during the six months ended January 31, 1995 and
1994, respectively. Interest expense for the six months ended
January 31, 1995 amounted to $454,000.
5. Income taxes paid during the six months ended January 31, 1995
and 1994 amounted to $1,562,000 and $2,946,000, 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.
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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 reflects a current ratio of 6.8 to 1 at
January 31, 1995 and July 31, 1994, respectively. Cash, cash
equivalents and marketable securities, along with accounts and notes
receivable, constitute approximately 74% of current assets at January
31, 1995. 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 0.29 to 1 at January 31, 1995 and
0.30 to 1 at July 31, 1994.
Capital expenditures totaled approximately $4,751,000 during the six
months ended January 31, 1995.
RESULTS OF OPERATIONS
Six Months Fiscal 1995 (01/31/95) vs. Six Months Fiscal 1994 (01/31/94)
Product, service, engineering and licensing revenues for the six months
ended January 31, 1995 were $96,156,000 as compared to $88,786,000 for
the same period last year. The increase of $7,370,000 was principally
due to an increase in sales of Medical Technology Products of
$9,411,000 and Signal Processing Technology Products of $883,000 offset
by decreased sales of Industrial Technology Products of $2,924,000.
Other operating revenue of $4,800,000 and $4,569,000 represents
revenue from the Hotel operation for the six months ending January 31,
1995 and 1994, respectively.
The percentage of total cost of sales to total net sales for the six
months of fiscal 1995 and fiscal 1994 were 56% and 52%, respectively.
The increase was primarily due to higher direct material costs, product
mix, lower selling prices in certain ultrasound medical technology
products caused by competitive pressures, and additional manufacturing
costs associated with the introduction of new products. Operating
costs associated with the Hotel during the six months of fiscal 1995
and 1994 were $2,611,000 and $2,644,000, respectively.
General and administrative and selling expenses remained unchanged over
the six month period ending January 31, 1995 and 1994, respectively.
Research and product development expenses increased $1,788,000
primarily due to the addition of staff supporting new medical
technology product development programs.
Computer software costs of $1,513,000 and $700,000 were capitalized in
the six months of fiscal 1995 and 1994, respectively. Amortization of
capitalized software amounted to $1,159,000 and $801,000 in the first
six 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 $595,000 for the first six
months of fiscal 1994.
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<PAGE>8
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Six Months Fiscal 1995 (01/31/95) vs. Six Months Fiscal 1994 (01/31/94)
(continued)
During the first six months of fiscal 1994, the Company's investment
in Analogic Scientific was increased by $1,000,000 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 six months ended January 31, 1995 and
1994 amounted to $454,000 and $541,000, respectively.
Minority interest in the net loss of B&K was $21,000 for the six months
ended January 31, 1995 compared to minority interest in the net income
of B&K of $795,000 for the six months ended January 31, 1994. Minority
interest in the net loss of a domestic subsidiary for the six months
ended January 31, 1994 amounted to $138,000.
The effective tax rate for the six months of fiscal 1995 was 21% vs.
23% for the six months of fiscal 1994. The decrease was primarily due
to the utilization of research and experimental tax credits.
Net income for the six months ended January 31, 1995 was $6,606,000 or
$.53 per share as compared with $6,963,000 or $.56 per share for the
same period last year. As discussed above, the decrease was caused
primarily by lower gross margin and higher research and product
development costs.
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<PAGE>9
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Second Quarter Fiscal 1995 (01/31/95) vs. Second Quarter Fiscal 1994
(01/31/94)
Product, service, engineering and licensing revenues for the three
months ended January 31, 1995 were $49,453,000 as compared to
$46,629,000 for the same period last year. The increase of $2,824,000
was principally due to an increase in sales of Medical Technology
Products of $3,056,000 and Signal Processing Technology Products of
$1,093,000 and offset by decreased sales of Industrial Technology
Products of $1,325,000. Other operating revenue of $1,794,000 and
$1,805,000 represents revenue from the Hotel operation for the three
months ending January 31, 1995 and 1994, respectively.
The percentage of total cost of sales to total net sales for the three
months of fiscal 1995 and fiscal 1994 were 57% and 53%, respectively.
The increase was primarily due to higher direct material costs, product
mix, lower selling prices in certain ultrasound medical technology
products caused by competitive pressures, and additional manufacturing
costs associated with the introduction of new products. Operating
costs associated with the Hotel during the three months of fiscal 1995
and 1994 were $1,164,000 and $1,177,000, respectively.
General and administrative and selling expenses decreased $755,000
primarily are results of the Company's efforts in reducing costs.
Research and product development expenses increased $804,000 primarily
due to the addition of staff supporting new medical technology product
development programs.
Computer software costs of $764,000 and $350,000 were capitalized in
the second quarter of fiscal 1995 and 1994, respectively. Amortization
of capitalized software amounted to $578,000 and $401,000 in the second
quarter 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 $160,000 for the second quarter
of fiscal 1994.
During the second 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 January 31, 1995 and
1994 amounted to $166,000 and $275,000 respectively.
Minority interest in the net income of B&K for the three months ended
January 31, 1995 and 1994 amounted to $424,000 and $826,000
respectively. Minority interest in the net loss of a domestic
subsidiary for the three months ended January 31, 1994 was $22,000.
The effective tax rate for the three months of fiscal 1995 was 22% vs.
16% for the three months of fiscal 1994. The change was primarily due
to non-taxable income of a foreign subsidiary, (B&K), during the three
months of fiscal 1994.
Net income for the three months ended January 31, 1995 was $3,132,000
or $.25 per share as compared with $3,762,000 or $.30 per share for the
three months ended January 31, 1994. As discussed above, the decrease
was caused primarily by lower gross margin and higher research and
product development costs.
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<PAGE>10
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.
(b) During the quarter ended January 31, 1995, the Company did not
file any
reports on Form 8-K.
- 10 -
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<PAGE>11
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 March 10, 1995 /s/ Bernard M. Gordon
Bernard M. Gordon
Chairman of the Board
Chief Executive Officer
Date March 10, 1995 /s/ John A. Tarello
John A. Tarello
Senior Vice President
(Chief Accounting Officer)
<PAGE>
<PAGE>12
ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No. Page No.
11 Calculation of Earnings per Share 13
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<PAGE>13
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 Six Months Ended
January 31, January 31,
1995 1994 1995 1994
PRIMARY:
Net Income $3,132,000 $3,762,000 $6,606,000 $6,963,000
Average shares
outstanding 12,355,943 12,349,859 12,352,588 12,358,388
Add: Incremental shares to reflect dilutive stock
options deemed common stock equivalents.
(Computed by treasury stock method.)
120,928 97,221 106,550 92,926
Common and common equivalent
shares outstanding 12,476,871 12,447,080 12,459,138 12,451,314
Earnings per share $.25 $.30 $.53 $.56
ASSUMING FULL DILUTION:
Net Income $3,132,000 $3,762,000 $6,606,000 $6,963,000
Average shares
outstanding 12,355,943 12,349,859 12,352,588 12,358,388
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.
129,373 108,758 116,664 104,127
Average common shares
outstanding 12,485,316 12,458,617 12,469,252 12,462,515
Earnings per share $.25 $.30 $.53 $.56
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's 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> 6-MOS
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> JAN-31-1995
<CASH> 18839
<SECURITIES> 80049
<RECEIVABLES> 38523
<ALLOWANCES> 1184
<INVENTORY> 43467
<CURRENT-ASSETS> 184991
<PP&E> 128431
<DEPRECIATION> 78922
<TOTAL-ASSETS> 248086
<CURRENT-LIABILITIES> 27108
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 248086
<SALES> 96156
<TOTAL-REVENUES> 103468
<CGS> 53824
<TOTAL-COSTS> 56435
<OTHER-EXPENSES> 37658
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 454
<INCOME-PRETAX> 8921
<INCOME-TAX> 1882
<INCOME-CONTINUING> 6606
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<NET-INCOME> 6606
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
</TABLE>
