<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, 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 October 31, 1995 was
12,431,020
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ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX
Page
No.
Part I Financial Information
Consolidated Condensed Balance Sheets
October 31, 1995 and July 31, 1995 3
Consolidated Condensed Statements of Income
Three Months Ended October 31, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows
Three Months Ended October 31, 1995 and 1994 5 - 6
Notes to Consolidated Condensed Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 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)
October 31, July 31,*
1995 1995
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 12,668 $ 12,404
Marketable securities, at market 85,302 87,398
Accounts and notes receivable, net 39,533 45,212
Inventories 50,724 46,287
Prepaid expenses and other current assets 5,110 5,108
Total current assets 193,337 196,409
Property, plant and equipment, net 49,266 49,762
Investments in and advances to affiliated companies 6,483 6,574
Excess of cost over acquired net assets,
net of accumulated amortization 602 681
Other assets, including unamortized software
costs ($6,490 and $6,413) 7,458 6,772
$257,146 $260,198
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage and other notes payable $ 356 $ 365
Obligations under capital leases 404 393
Accounts payable, trade 14,063 12,467
Accrued employee compensation and benefits 7,468 9,008
Accrued expenses 4,848 6,545
Accrued income taxes 1,353 1,832
Accrued dividends payable 497
Total current liabilities 28,989 30,610
Long-term debt:
Mortgage and other notes payable 6,819 7,016
Obligations under capital leases 3,114 3,220
Deferred income taxes 4,690 4,683
Minority interest in subsidiaries 10,822 12,489
Excess of acquired net assets over cost, net
of accumulated amortization 1,154 1,287
Stockholders' equity:
Common stock, $.05 par 685 685
Capital in excess of par value 20,517 20,517
Retained earnings 192,800 191,938
Unrealized holding gains and losses 2,311 2,004
Cumulative translation adjustments 2,223 2,846
Treasury stock, at cost (14,449) (14,470)
Unearned compensation (2,529) (2,627)
201,558 200,893
$257,146 $260,198
* 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: 1995 1994
Product and service, net $39,489 $45,015
Engineering and licensing 1,400 1,688
Other operating revenue 3,228 3,006
Interest and dividend income 2,362 1,222
Total revenues 46,479 50,931
Costs and expenses:
Cost of sales:
Product and service 24,927 25,140
Engineering and licensing 1,339 598
Other operating expenses 1,538 1,447
General and administrative 4,283 4,493
Selling 6,885 7,061
Research and product development 6,902 7,569
Interest expense 185 240
(Gain) loss on foreign exchange (61) 247
Amortization of excess of acquired
net assets over cost (133) (133)
Amortization of excess of cost
over acquired net assets 79 97
Total cost of sales and expenses 45,944 46,759
Income before income taxes 535 4,172
Provision (benefit) for income taxes (283) 855
Minority interest in net loss
of consolidated subsidiaries (541) (157)
Net income $ 1,359 $ 3,474
Average common and common
equivalent shares outstanding 12,540 12,441
Earnings per common and common
equivalent share $0.11 $0.28
Dividends declared per share $0.04 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: 1995 1994
Net income $ 1,359 $ 3,474
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,540 1,612
Amortization of capitalized software 477 581
Amortization of excess of cost over
acquired net assets 79 97
Amortization of excess of acquired net
assets over cost (133) (133)
Minority interest in net loss of
consolidated subsidiaries (541) (157)
Compensation from stock grants 166 177
Gain sale of equipment (4) (8)
Changes in operating assets and liabilities
Decrease (increase) in assets:
Accounts and notes receivable 5,679 (895)
Inventories (4,437) (3,733)
Prepaid expenses and other current assets (194) (90)
Other assets (609) 6
Increase (decrease) in liabilities:
Accounts payable, trade 1,596 1,909
Accrued expenses and other current liabilities (4,279) (1,166)
Accrued and deferred income taxes (280) 881
Accrued dividends payable 497
TOTAL ADJUSTMENTS (443) (919)
NET CASH PROVIDED BY OPERATING ACTIVITIES 916 2,555
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (1,044) (2,123)
Capitalized software (554) (798)
Purchases of marketable securities (9,750) (7,415)
Maturities of marketable securities 12,160 3,960
Proceeds from sale of property, plant and equipment 4 8
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 816 (6,368)
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ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
(UNAUDITED)
(000 omitted)
Three Months Ended
October 31,
1995 1994
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt and capital lease obligations (301) (202)
Purchase of common stock for treasury (113)
Purchase of common stock of majority owned subsidiary (116)
Issuance of common stock pursuant to stock options
and employee stock purchase plan 69 23
Dividends declared to shareholders (497)
NET CASH USED BY FINANCING ACTIVITIES (845) (292)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (623) 886
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 264 (3,219)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 12,404 23,571
CASH AND CASH EQUIVALENTS, END OF PERIOD $12,668 $20,352
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, 1995 and
July 31, 1995, the results of its operations for the three months ended
October 31, 1995 and 1994 and statements of cash flows for the three
months then ended. The results of the operations for the three months
ended October 31, 1995 are not necessarily indicative of the results to
be expected for the fiscal year ending July 31, 1996.
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, 1995.
2. Financial statements, with the exception of the July 31, 1995 balance
sheet, are unaudited and have not been examined by independent certified
public accountants. The consolidated balance sheet as of July 31, 1995
contains data derived from audited financial statements.
3. The inventories as of October 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:
October 31, July 31,
1995 1995
Raw materials $20,165,000 $18,883,000
Work-in-process 17,458,000 16,037,000
Finished goods 13,101,000 11,367,000
$50,724,000 $46,287,000
4. Total interest expense, amounted to $228,000 of which $43,000 was
capitalized during the three months ended October 31, 1995. Interest
paid amounted to $245,000 and $242,000 during the three months ended
October 31, 1995 and 1994, respectively.
5. Income taxes paid during the three months ended October 31, 1995 and
1994 amounted to $180,000 and $61,000, respectively.
6. The Company declared a dividend of $.04 per common share on October 5,
1995, payable on November 3, 1995 to shareholders of record on October
20, 1995.
7. Certain financial statement items have been reclassified to conform to
the current periods' format.
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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, 1995 reflects a current ratio of
6.7 to 1 compared to 6.4 to 1 at July 31, 1995. Cash, cash equivalents and
marketable securities, along with accounts and notes receivable, constitute
approximately 71% of current assets at October 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 0.28 to 1 at October 31, 1995 and 0.30 to
1 at July 31, 1995.
Capital expenditures totaled approximately $1,044,000 during the three months
ended October 31, 1995.
RESULTS OF OPERATIONS
Three Months Fiscal 1996 (10/31/95) vs. Three Months Fiscal 1995 (10/31/94)
Product, service, engineering and licensing revenues for the three months
ended October 31, 1995 were $40,889,000 as compared to $46,703,000 for the
same period last year. The decrease of $5,814,000 was principally due to a
decrease in sales of Medical Technology Products of $6,914,000 offset by
increased sales of Signal Processing Technology Products of $725,000 and
Industrial Technology Products of $375,000. Other operating revenue of
$3,228,000 and $3,006,000 represents revenue from the Hotel operation for the
three months ending October 31, 1995 and 1994, respectively. The increase in
interest and dividend income is primarily due to dividends received resulting
from the Company's investment in a limited partnership.
The percentage of total cost of sales to total net sales for the three months
of fiscal 1996 and fiscal 1995 were 64% and 55%, respectively. The increase
was primarily due to higher direct material costs, less favorable product
mix, lower selling prices caused by competitive pressures in certain
ultrasound medical technology products, additional manufacturing costs
associated with the introduction of new products for the medical and
industrial markets and lower sales volume. Operating costs associated with
the Hotel during the three months of fiscal 1996 and 1995 were $1,538,000 and
$1,447,000, respectively.
General and administrative and selling expenses decreased $386,000 primarily
due to a cost reduction program and a reduction in advertising expense.
Research and product development expenses decreased $667,000 primarily due to
a reduction in the engineering effort applicable to the development of the
mobile CAT Scanner.
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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 1996 (10/31/95) vs. Three Months Fiscal 1995 (10/31/94)
(continued)
A gain on foreign exchange of $61,000 was realized during the first quarter
of fiscal 1996 versus a loss of $247,000 for the same period last year.
Computer software costs of $554,000 and $749,000 were capitalized in the
first three months of fiscal 1996 and 1995, respectively. Amortization of
capitalized software amounted to $477,000 and $581,000 in the first three
months of fiscal 1996 and 1995, respectively.
Minority interest in the net loss of the Company's consolidated subsidiary,
Camtronics, for the three months ended October 31, 1995 amounted to $33,000
compared to minority interest in the net income of Camtronics of $288,000 for
the three months ended October 31, 1994.
Minority interest in the net loss of B&K for the three months ended October
31, 1995 and 1994 amounted to $508,000 and $445,000, respectively.
The tax benefit in the quarter ended October 31, 1995 was primarily a result
of the benefit at the statutory tax rate on the loss of the Company's
subsidiary in Denmark offset, in part, by the utilization of the alternative
minimum tax benefit carry forwards applicable to profits of the remainder of
the Company.
Net income for the three months ended October 31, 1995 was $1,359,000 or $.11
per share as compared with $3,474,000 or $.28 per share for the same period
last year. As noted above, the decrease was caused primarily by a less
favorable product mix, competitive pricing pressures in certain medical
markets, an increase in manufacturing costs associated with the introduction
of more sophisticated complete systems to the medical and industrial markets
and lower sales volume.
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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.
(b) During the quarter ended October 31, 1995, the Company did not file any
reports on Form 8-K.
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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 December 8, 1995 /s/ Bernard M. Gordon
Bernard M. Gordon
Chairman of the Board
Chief Executive Officer
Date December 8, 1995 /s/ John A. Tarello
John A. Tarello
Senior Vice President
Chief Financial Officer
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<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
October 31,
1995 1994
PRIMARY:
Net Income $1,359,000 $3,474,000
Average shares outstanding 12,425,400 12,349,234
Add: Incremental shares to
reflect dilutive stock
options deemed common
stock equivalents.
(Computed by treasury
stock method.) 114,835 92,172
Common and common equivalent
shares outstanding 12,540,235 12,441,406
Earnings per share $.11 $.28
ASSUMING FULL DILUTION:
Net Income $1,359,000 $3,474,000
Average shares outstanding 12,425,400 12,349,234
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. 115,018 103,955
Average common shares
outstanding 12,540,418 12,453,189
Earnings per share $.11 $.28
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<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> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> OCT-31-1995
<CASH> 12668
<SECURITIES> 85302
<RECEIVABLES> 39533
<ALLOWANCES> 1307
<INVENTORY> 50724
<CURRENT-ASSETS> 193337
<PP&E> 131522
<DEPRECIATION> 82256
<TOTAL-ASSETS> 257146
<CURRENT-LIABILITIES> 28989
<BONDS> 0
<COMMON> 685
0
0
<OTHER-SE> 200873
<TOTAL-LIABILITY-AND-EQUITY> 257146
<SALES> 40889
<TOTAL-REVENUES> 46479
<CGS> 26266
<TOTAL-COSTS> 27804
<OTHER-EXPENSES> 17955
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 185
<INCOME-PRETAX> 535
<INCOME-TAX> (283)
<INCOME-CONTINUING> 1359
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1359
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
