<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 April 30, 1996
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 April 30, 1996 was
12,472,507
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<PAGE>2
ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX
Page
No.
Part I Financial Information
Consolidated Condensed Balance Sheets
April 30, 1996 and July 31, 1995 3
Consolidated Condensed Statements of Income
Three and Nine Months Ended April 30, 1996 and 1995 4
Consolidated Statements of Cash Flows
Nine Months Ended April 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6 - 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 10
Part II Other Information 11 - 12
Index to Exhibits 13
Exhibit 11 - Calculation of Earnings per Share 14
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<PAGE>3
PART I FINANCIAL INFORMATION
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000 omitted)
April 30, July 31,*
1996 1995
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 15,231 $ 12,404
Marketable securities, at market 81,643 87,398
Accounts and notes receivable, net 43,825 45,212
Inventories 50,928 46,287
Prepaid expenses and other current assets 4,636 5,108
Total current assets 196,263 196,409
Property, plant and equipment, net 49,411 49,762
Investments in and advances to affiliated
companies 8,444 6,574
Excess of cost over acquired net assets,
net of accumulated amortization 444 681
Other assets, including unamortized software
costs ($6,266 and $6,413) 7,116 6,772
$261,678 $260,198
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage and other notes payable $ 1,745 $ 365
Obligations under capital leases 429 393
Accounts payable, trade 12,008 12,467
Accrued employee compensation and benefits 8,829 9,008
Accrued expenses 5,593 6,545
Accrued income taxes 718 1,832
Total current liabilities 29,322 30,610
Long-term debt:
Mortgage and other notes payable 6,725 7,016
Obligations under capital leases 2,894 3,220
Deferred income taxes 4,708 4,683
Minority interest in subsidiaries 10,454 12,489
Excess of acquired net assets over cost, net
of accumulated amortization 888 1,287
Stockholders' equity:
Common stock, $.05 par 688 685
Capital in excess of par value 20,942 20,517
Retained earnings 197,441 191,938
Unrealized holding gains and losses 3,313 2,004
Cumulative translation adjustments 1,129 2,846
Treasury stock, at cost (14,608) (14,470)
Unearned compensation (2,218) (2,627)
206,687 200,893
$261,678 $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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<PAGE>4
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(000 omitted, except per share data)
Three Months Ended Nine Months Ended
April 30, April 30,
Revenues: 1996 1995 1996 1995
Product and service, net $54,038 $44,830 $142,935 $137,516
Engineering and licensing 2,740 798 4,727 4,268
Other operating revenue 2,502 2,225 7,587 7,025
Interest and dividend income 1,206 1,251 4,861 3,763
Total revenues 60,486 49,104 160,110 152,572
Costs and expenses:
Cost of sales:
Product and service 32,639 25,017 87,953 77,556
Engineering and licensing 2,628 765 4,749 2,050
Other operating expenses 1,430 1,313 4,150 3,924
General and administrative 4,554 4,324 13,506 12,420
Selling 6,748 7,501 20,534 21,836
Research and product development 7,458 7,288 21,129 22,483
Interest expense 214 205 600 659
(Gain) loss on foreign exchange (110) 575 (606) 679
Amortization of excess of acquired
net assets over cost (133) (133) (399)
(399)
Amortization of excess of cost
over acquired net asset 79 96 237 290
Total cost of sales and expenses 55,507 46,951 151,853 141,498
Income from operations 4,979 2,153 8,257 11,074
Equity in net loss of
unconsolidated affiliate (560) (560)
Income before income taxes 4,419 2,153 7,697 11,074
Provision for income taxes 1,137 500 1,474 2,382
Minority interest in net income (loss)
of consolidated subsidiaries (480) (213) (898) 220
Net income $ 3,762 $ 1,866 $ 7,121 $ 8,472
Average common and common
equivalent shares outstanding 12,551 12,498 12,548 $ 12,473
Earnings per common and common
equivalent share $0.30 $0.15 $0.57 $0.68
Dividends declared per share $0.05 $0.04 $0.13 $0.08
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)
Nine Months Ended
April 30,
CASH FLOWS FROM OPERATING ACTIVITIES: 1996 1995
Net income $ 7,121 $ 8,472
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 4,576 4,809
Amortization of capitalized software 1,562 1,764
Amortization of excess of cost over
acquired net assets 237 290
Amortization of excess of acquired net
assets over cost (399) (399)
Minority interest in net income (loss) of
consolidated subsidiaries (898) 220
Compensation from stock grants 573 532
Gain on sale of equipment (6) (17)
Changes in operating assets and liabilities
Decrease (increase) in assets:
Accounts and notes receivable 1,387 (3,690)
Inventories (4,641) (4,412)
Prepaid expenses and other current assets 306 (127)
Other assets (264) (104)
Increase (decrease) in liabilities:
Accounts payable, trade (459) 1,309
Accrued expenses and other current liabilities (2,496) 927
Accrued and deferred income taxes (923) 1,888
TOTAL ADJUSTMENTS (1,445) 2,990
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,676 11,462
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (4,225) (6,640)
Capitalized software (1,415) (2,303)
Purchases of marketable securities (20,508) (18,244)
Maturities of marketable securities 27,572 10,475
Proceeds from sale of property, plant and equipment 7 17
Investments in and advances to affiliated companies (1,870)
NET CASH USED BY INVESTING ACTIVITIES (439) (16,695)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt and capital lease obligations 799 (2,186)
Purchase of common stock for treasury (210) (325)
Purchase of common stock of majority owned subsidiary (138) (244)
Issuance of common stock pursuant to stock options
and employee stock purchase plan 474 249
Dividends paid shareholders (1,618) (495)
NET CASH USED BY FINANCING ACTIVITIES (693) (3,001)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (1,717) 2,055
NET INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS 2,827 (6,179)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 12,404 23,571
CASH AND CASH EQUIVALENTS, END OF PERIOD $15,231 $17,392
The accompanying notes are an integral part of these financial statements.
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<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 April 30, 1996 and July
31, 1995, the results of its operations for the three and nine months
ended April 30, 1996 and 1995 and statements of cash flows for the nine
months then ended. The results of the operations for the three and nine
months ended April 30, 1996 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 April 30, 1996 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:
April 30, July 31,
1996 1995
Raw materials $21,326,000 $18,883,000
Work-in-process 16,936,000 16,037,000
Finished goods 12,666,000 11,367,000
$50,928,000 $46,287,000
4. On February 13, 1996, the Company acquired 1,715,384 shares of Park
Meditech Common Stock and an 11% Convertible Unsecured Subordinated
Debenture in the principal amount of $750,000 in consideration of the
cancellation of a Convertible Subordinated Promissory Note in the
amount of $1,500,000 and 200,000 Common Share purchase warrants. With
certain restrictions, the Convertible Unsecured Subordinated Debenture
may be converted into Common Shares at a price of $1.20 (Canadian) per
Common Share.
5. On February 22, 1996, the Company invested $2,000,000 for a 33% interest
in a newly formed privately held company which will design and
manufacture subassemblies for medical imaging equipment.
6. Total interest expense, amounted to $732,000 of which $132,000 was
capitalized during the nine months ended April 30, 1996. Interest paid
amounted to $577,000 and $617,000 during the nine months ended April 30,
1996 and 1995, respectively.
7. Income taxes paid during the nine months ended April 30, 1996 and 1995
amounted to $1,994,000 and $1,674,000, respectively.
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<PAGE>7
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
8. 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. On December 19, 1995, the Company declared a $.04 dividend
per common share, payable on January 17, 1996 to shareholders of record
on January 3, 1996. On March 14, 1996 the Company declared a $.05
dividend per share, representing a 25% increase over the previous
dividend, payable on April 12, 1996 to shareholders of record on March
29, 1996.
9. Certain financial statement items have been reclassified to conform to
the current periods' format.
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<PAGE>8
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 6.7 to 1 at April 30,
1996 compared to 6.4 to 1 at July 31, 1995. Cash, cash equivalents and
marketable securities, along with accounts and notes receivable, constitute
approximately 72% of current assets at April 30, 1996. 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 0.27 to 1 at April 30, 1996 and 0.30 to 1
at July 31, 1995.
Capital expenditures totaled approximately $4,225,000 during the nine months
ended April 30, 1996.
As part of a stock repurchase program authorized by the Board of Directors,
the Company purchased 11,000 shares of Common Stock for its treasury during
the nine month period ending April 30, 1996 at an aggregate cost of $210,000.
RESULTS OF OPERATIONS
Nine Months Fiscal 1996 (04/30/96) vs. Nine Months Fiscal 1995 (04/30/95)
Product, service, engineering and licensing revenues for the nine months
ended April 30, 1996 were $147,662,000 as compared to $141,784,000 for the
same period last year. The increase of $5,878,000 was principally due to
increased sales of Medical Technology Products of $2,685,000, Industrial
Technology Products of $2,352,000 and Signal Processing Technology Products
of $841,000. Other operating revenue of $7,587,000 and $7,025,000 represents
revenue from the Hotel operation for the nine months ending April 30, 1996
and 1995, respectively.
The percentage of total cost of sales to total net sales for the nine months
of fiscal 1996 and fiscal 1995 were 63% and 56%, respectively. The increase
was primarily due to higher direct material costs, less favorable product
mix, lower selling prices caused by competitive pressure in certain
ultrasound medical technology markets and additional manufacturing costs
associated with the introduction of the Company's unique, lightweight, low-
power CT Scanner. Operating costs associated with the Hotel during the nine
months of fiscal 1996 and 1995 were $4,150,000 and $3,924,000, respectively.
General and administrative and selling expenses decreased by $216,000 a
result of lower selling expenses primarily in the areas of advertising and
staff expenses, offset by higher general and administrative expenses relating
to staffing and facilities. Research and product development expenses
decreased $1,354,000 primarily due to a reduction in the engineering effort
applicable to the development of the mobile CT Scanner.
A gain on foreign exchange of $606,000 was realized during the first nine
months of fiscal 1996 versus a loss of $679,000 for the same period last
year.
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ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Nine Months Fiscal 1996 (04/30/96) vs. Nine Months Fiscal 1995 (04/30/95)
(continued)
Computer software costs of $1,415,000 and $2,303,000 were capitalized in the
nine months of fiscal 1996 and 1995, respectively. Amortization of
capitalized software amounted to $1,562,000 and $1,764,000 in the first nine
months of fiscal 1996 and 1995, respectively.
The Company's share of equity in losses of a newly formed privately held
company amounted to $560,000 for the nine months ending April 30, 1996. (See
note 5 of notes to consolidated condensed financial statements.)
Minority interest in the net loss of the Company's consolidated subsidiary,
Camtronics, for the nine months ended April 30, 1996 amounted to $59,000
compared to minority interest in the net income of Camtronics of $519,000 for
the nine months ended April 30, 1995.
Minority interest in the net loss of the Company's consolidated subsidiary
B&K, for the nine months ended April 30, 1996 and 1995 amounted to $839,000
and $299,000, respectively.
The effective tax rate for the nine months of fiscal 1996 was 19% vs. 22% for
the nine months of fiscal 1995. The decrease 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
benefits carry forward applicable to profits of the remainder of the Company.
Net income for the nine months ended April 30, 1996 was $7,121,000 or $.57
per share as compared with $8,472,000 or $.68 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 and an increase in manufacturing costs associated with the
introduction of more sophisticated complete systems to the medical and
industrial markets.
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<PAGE>10
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Quarter Fiscal 1996 (04/30/96) vs. Third Quarter Fiscal 1995 (04/30/95)
Product, service, engineering and licensing revenues for the three months
ended April 30, 1996 were $56,778,000 as compared to $45,628,000 for the same
period last year. The increase of $11,150,000 was principally due to an
increase in sales of Medical Technology Products of $9,384,000, Industrial
Technology Products of $1,789,000 offset by a small decrease in Signal
Processing Technology Products of $23,000. Other operating revenue of
$2,502,000 and $2,225,000 represents revenue from the Hotel operation for the
three months ending April 30, 1996 and 1995, respectively.
The percentage of total cost of sales to total net sales for the three months
of fiscal 1996 and fiscal 1995 were 62% and 57%, respectively. The increase
was primarily due to higher direct material costs, lower selling prices
caused by competitive pressures in certain ultrasound medical technology
markets and additional manufacturing costs associated with the introduction
of the Company's unique, lightweight, low-power CT Scanner. Operating costs
associated with the Hotel during the three months of fiscal 1996 and 1995
were $1,430,000 and $1,313,000, respectively.
General and administrative and selling expenses decreased $523,000 primarily
the result of lower selling expenses in the areas of advertising and
staffing.
A gain on foreign exchange of $110,000 was realized during the third quarter
of fiscal 1996 versus a loss of $575,000 for the same period last year.
Computer software costs of $412,000 and $790,000 were capitalized in the
third quarter of fiscal 1996 and 1995, respectively. Amortization of
capitalized software amounted to $691,000 and $605,000 in the third quarter
of fiscal 1996 and 1995, respectively.
The Company's share of equity of losses of a newly formed privately held
company amounted to $560,000. (See note 5 of notes to consolidated condensed
financial statements.)
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, for the three months ended April 30, 1996 and 1995 amounted to
$29,000 and $66,000 respectively.
Minority interest in the net loss of B&K for the three months ended April 30,
1996 and 1995 amounted to $509,000 and $279,000, respectively.
The effective tax rate for the third quarter of fiscal 1996 was 26% vs. 23%
for the third quarter of fiscal 1995. The increase was due to losses in a
foreign subsidiary for which there is no tax benefit.
Net income for the three months ended April 30, 1996 was $3,762,000 or $.30
per share as compared with $1,866,000 or $.15 per share for the three months
ended April 30, 1995. The increase was caused primarily by a substantial
increase in revenues.
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<PAGE>11
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 April 30, 1996, the Company did not file any
reports on Form 8-K.
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<PAGE>12
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 June 04, 1996 /s/ Bernard M. Gordon
Bernard M. Gordon
Chairman of the Board
Chief Executive Officer
Date June 04, 1996 /s/ John A. Tarello
John A. Tarello
Senior Vice President
Chief Accounting Officer
<PAGE>
<PAGE>13
ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit No. Page No.
11 Calculation of Earnings per Share 14
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<PAGE>14
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 Nine Months Ended
April 30, April 30,
1996 1995 1996 1995
PRIMARY:
Net Income $3,762,000 $1,866,000 $7,121,000 $ 8,472,000
Average shares outstanding 12,473,867 12,379,296 12,445,250 12,362,881
Add: Incremental shares to
reflect dilutive stock
options deemed common
stock equivalents.
(Computed by treasury
stock method.) 77,260 118,616 93,945 110,572
Common and common equivalent
shares outstanding 12,551,127 12,497,912 12,548,195 12,473,453
Earnings per share $.30 $.15 $.57 $.68
ASSUMING FULL DILUTION:
Net Income $3,762,000 $1,866,000 $7,121,000 $ 8,472,000
Average shares outstanding 12,473,857 12,379,296 12,454,250 12,362,881
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. 95,152 114,114 94,499 115,814
Average common shares
outstanding 12,569,009 12,493,410 12,548,749 12,478,695
Earnings per share $.30 $.15 $.57 $.68
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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> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> APR-30-1996
<CASH> 15231
<SECURITIES> 81643
<RECEIVABLES> 43825
<ALLOWANCES> 1369
<INVENTORY> 50928
<CURRENT-ASSETS> 196263
<PP&E> 134214
<DEPRECIATION> 84803
<TOTAL-ASSETS> 261678
<CURRENT-LIABILITIES> 29322
<BONDS> 0
0
0
<COMMON> 688
<OTHER-SE> 205999
<TOTAL-LIABILITY-AND-EQUITY> 261678
<SALES> 147662
<TOTAL-REVENUES> 160110
<CGS> 92702
<TOTAL-COSTS> 96852
<OTHER-EXPENSES> 54401
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 600
<INCOME-PRETAX> 8257
<INCOME-TAX> 1474
<INCOME-CONTINUING> 7121
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7121
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
</TABLE>
