<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, 1997
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, 1997 was
12,561,219<PAGE>
<PAGE>2
ANALOGIC CORPORATION AND SUBSIDIARIES
INDEX
Page
No.
Part I Financial Information
Consolidated Condensed Balance Sheets
April 30, 1997 and July 31, 1996 3
Consolidated Condensed Statements of Income
Three and Nine Months Ended April 30, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows
Nine Months Ended April 30, 1997 and 1996 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
<PAGE>
<PAGE>3
PART I FINANCIAL INFORMATION
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000 omitted)
April 30, July 31,*
1997 1996
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 18,995 $ 18,040
Marketable securities, at market 91,168 82,509
Accounts and notes receivable, net 45,912 46,815
Inventories 49,706 50,232
Prepaid expenses and other current assets 4,384 4,416
Total current assets 210,165 202,012
Property, plant and equipment, net 47,793 47,756
Investments in and advances to affiliated companies 7,071 8,129
Excess of cost over acquired net assets,
net of accumulated amortization 192 375
Other assets, including unamortized software
costs ($4,708 and $6,073) 5,335 6,890
$270,556 $265,162
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Mortgage and other notes payable $ 343 $ 3,644
Obligations under capital leases 482 442
Accounts payable, trade 11,558 11,438
Accrued employee compensation and benefits 9,250 9,822
Accrued expenses 6,705 6,153
Accrued income taxes 1,995 1,998
Total current liabilities 30,333 33,497
Long-term debt:
Mortgage and other notes payable 6,382 6,677
Obligations under capital leases 2,411 2,778
Deferred income taxes 4,870 4,832
Minority interest in subsidiaries 4,813 4,268
Excess of acquired net assets over cost, net
of accumulated amortization 826 1,310
Stockholders' equity:
Common stock, $.05 par 691 688
Capital in excess of par value 22,267 21,413
Retained earnings 214,601 202,761
Unrealized holding gains and losses 169 2,092
Cumulative translation adjustments (635) 1,539
Treasury stock, at cost (14,281) (14,550)
Unearned compensation (1,891) (2,143)
220,921 211,800
$270,556 $265,162
* See note 2 of notes to consolidated condensed financial statements for
further information.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<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,
1997 1996 1997 1996
Revenues:
Product and service, net $54,649 $54,038 $161,295 $142,935
Engineering and licensing 5,539 2,740 11,744 4,727
Other operating revenue 2,579 2,502 8,224 7,587
Interest and dividend income 1,403 1,206 4,111 4,861
Total revenues 64,170 60,486 185,374 160,110
Costs and expenses:
Cost of sales:
Product and service 32,594 32,639 94,473 87,953
Engineering and licensing 3,206 2,628 7,691 4,749
Other operating expenses 1,432 1,430 4,429 4,150
General and administrative 4,435 4,554 13,192 13,506
Selling 6,435 6,748 18,992 20,534
Research and product development 8,091 7,458 25,697 21,129
Interest expense 142 214 489 600
Gain on foreign exchange (359) (110) (697) (606)
Amortization of excess of acquired
net assets over cost (161) (133) (484) (399)
Amortization of excess of cost
over acquired net assets 51 79 183 237
Total cost of sales and expenses 55,864 55,507 163,965 151,853
Income from operations 8,306 4,979 21,409 8,257
Equity in net loss of unconsolidated
affiliate (455) (560) (1,058) (560)
Income before income taxes
and minority interest 7,851 4,419 20,351 7,697
Provision for income taxes 2,199 1,137 6,086 1,474
Minority interest in net income (loss)
of consolidated subsidiaries 445 (480) 545 (898)
Net income $ 5,207 $ 3,762 $13,720 $ 7,121
Average common and common
equivalent shares outstanding 12,722 12,551 12,687 12,548
Earnings per common and common
equivalent share $0.41 $0.30 $1.08 $0.57
Dividends declared per share $0.05 $0.05 $0.15 $0.13
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE>5
ANALOGIC CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(000 omitted)
Nine Months Ended
April 30,
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
Net income $13,720 $ 7,121
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 4,414 4,576
Amortization of capitalized software 2,292 1,562
Amortization of excess of cost over
net acquired assets 183 237
Amortization of excess of acquired net
assets over cost (484) (399)
Minority interest in net gain (loss) of
consolidated subsidiaries 545 (898)
Compensation from stock grants 483 573
Gain on sale of equipment (56) (6)
Equity in loss of an unconsolidated affiliate 1,058 560
Changes in operating assets and liabilities
Decrease (increase) in assets:
Accounts and notes receivable 903 1,387
Inventories 526 (4,641)
Prepaid expenses and other current assets 32 306
Other assets 190 (264)
Increase (decrease) in liabilities:
Accounts payable, trade 120 (459)
Accrued expenses and other current liabilities (20) (2,496)
Accrued and deferred income taxes 35 (923)
TOTAL ADJUSTMENTS 10,221 (885)
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 23,941 6,236
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (4,454) (4,225)
Capitalized software (927) (1,415)
Purchases of marketable securities (19,867) (20,508)
Maturities of marketable securities 9,285 27,572
Proceeds from sale of property, plant and equipment 59 7
Investments in and advances to affiliated companies (2,430)
NET CASH USED BY INVESTING ACTIVITIES (15,904) (999)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of overdraft facility (3,305)
Payments on debt and capital lease obligations (618) 799
Purchase of common stock for treasury (210)
Purchase of common stock of majority owned subsidiary (138)
Issuance of common stock pursuant to stock options
and employee stock purchase plan 894 474
Dividends Paid (1,879) (1,618)
NET CASH USED BY FINANCING ACTIVITIES (4,908) (693)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (2,174) (1,717)
NET INCREASE IN CASH AND CASH EQUIVALENTS 955 2,827
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,040 12,404
CASH AND CASH EQUIVALENTS, END OF PERIOD $18,995 $15,231
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 April 30, 1997 and July
31, 1996, the results of its operations for the three and nine months
ended April 30, 1997 and 1996 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, 1997 are not necessarily indicative of the
results to be expected for the fiscal year ending July 31, 1997.
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, 1996.
2. Financial statements, with the exception of the July 31, 1996 balance
sheet, are unaudited and have not been examined by independent certified
public accountants. The consolidated balance sheet as of July 31, 1996
contains data derived from audited financial statements.
3. The inventories as of April 30, 1997 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,
1997 1996
Raw materials $19,780,000 $19,363,000
Work-in-process 17,992,000 17,830,000
Finished goods 11,934,000 13,039,000
$49,706,000 $50,232,000
4. Mortgage and other notes payable decreased $3,301,000 as a result of the
Company's Danish subsidiary reducing its uncollateralized bank overdraft
facility.
5. Total interest expense, amounted to $614,000 of which $125,000 was
capitalized during the nine months ended April 30, 1997. Interest paid
amounted to $590,000 and $577,000 during the nine months ended April 30,
1997 and 1996, respectively.
6. Income taxes paid during the nine months ended April 30, 1997 and 1996
amounted to $6,084,000 and $1,994,000, respectively.
7. The Company declared a dividend of $.05 per common share on October 9,
1996, payable on November 5, 1996 to shareholders of record on October
22, 1996. On January 24, 1997, the Company declared a $.05 dividend per
common share, payable on February 21, 1997 to shareholders of record on
February 7, 1997. On March 21, 1997, the Company declared a $.05
dividend per common share, payable on April 18, 1997 to shareholders of
record on April 4, 1997.
<PAGE>
<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 6.9 to 1 at April 30,
1997 compared to 6.0 to 1 at July 31, 1996. Cash, cash equivalents and
marketable securities, along with accounts and notes receivable, constitute
approximately 74% of current assets at April 30, 1997. 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 0.22 to 1 at April 30, 1997 and 0.25 to 1
at July 31, 1996.
Capital expenditures totaled approximately $4,454,000 during the nine months
ended April 30, 1997.
RESULTS OF OPERATIONS
Nine Months Fiscal 1997 (04/30/97) vs. Nine Months Fiscal 1996 (04/30/96)
Product, service, engineering and licensing revenues for the nine months
ended April 30 1997 were $173,039,000 as compared to $147,662,000 for the
same period last year, an increase of 17%. The increase of $25,377,000 was
due to increased sales of Medical Technology Products of $21,991,000,
(primarily due to sales of the Company's new CT Scanner), and Signal
Processing Technology Products of $5,195,000 offset by decreased sales of
Industrial Technology Products of $1,809,000. Other operating revenue of
$8,224,000 and $7,587,000 represents revenue from the Hotel operation for the
nine months ending April 30, 1997 and 1996, respectively.
Interest and dividend income decreased from $4,861,000 to $4,111,000
primarily due to a distribution in the first quarter of fiscal 1996 from a
limited partnership in which the Company has invested. During the nine
months of fiscal 1997 there was no distribution received from the limited
partnership.
The percentage of total cost of sales to total net sales for the nine months
of fiscal 1997 and 1996 was 59% and 63%, respectively. The decrease was
primarily due to a 17% increase in sales, diminished start up manufacturing
costs associated with the CT Scanner and a favorable product mix. Operating
costs associated with the Hotel during the nine months of fiscal 1997 and
1996 were $4,429,000 and $4,150,000, respectively.
General and administrative and selling expenses decreased by $1,856,000,
primarily due to a cost reduction program in the Company's Danish subsidiary.
Research and product development expenses increased $4,568,000 primarily due
to the expanding engineering effort applicable to developing complex
medical imaging systems and increased amortization of capitalized computer
software costs.
<PAGE>
<PAGE>8
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Nine Months Fiscal 1997 (04/30/97) vs. Nine Months Fiscal 1996 (04/30/96)
(continued)
Computer software costs of $927,000 and $1,415,000 were capitalized in the
nine months of fiscal 1997 and 1996, respectively. Amortization of
capitalized software amounted to $2,292,000 and $1,562,000 in the nine months
of fiscal 1997 and 1996, respectively.
A gain on foreign exchange of $697,000 was realized during the nine months of
fiscal 1997, compared to $606,000 for the same period last year.
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, for the nine months ended April 30, 1997 amounted to $545,000
compared to minority interest in the net loss of Camtronics of $59,000 for
the nine months ended April 30, 1996.
Minority interest in the net loss of the Company's consolidated subsidiary,
B&K, for the nine months ended April 30, 1996 amounted to $839,000. As of
July 1, 1996 the Company purchased the remaining 41% minority interest in
B&K.
The Company's share of losses of a newly formed privately held company
amounted to $1,058,000 and $560,000 during the nine months of fiscal 1997 and
1996, respectively.
The effective tax rate for the nine months of fiscal 1997 was 30% versus 19%
for the same period last year. The change in the rate was due to the
reduction in the utilization of tax credits.
Net income for the nine months ended April 30, 1997 was $13,720,000 or $1.08
per share as compared with $7,121,000 or $.57 per share for the same period
last year. As noted above the increase was caused primarily by higher sales
volume and gross margin.
<PAGE>
<PAGE>9
ANALOGIC CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Quarter Fiscal 1997 (04/30/97) vs. Third Quarter Fiscal 1996 (04/30/96)
Product, service, engineering and licensing revenues for the three months
ended April 30, 1997 were $60,188,000 as compared to $56,778,000 for the same
period last year, an increase of 6%. The increase of $3,410,000 was due to
increased sales of Medical Technology Products of $3,247,000, and Signal
Processing Technology Products of $1,076,000 offset by decreased sales in
Industrial Technology Products of $913,000. Other operating revenue of
$2,579,000 and $2,502,000 represents revenue from the Hotel operation for
the three months ending April 30, 1997 and 1996, respectively.
The percentage of total cost of sales to total net sales for the third
quarter of fiscal 1997 and fiscal 1996 was 60% and 62%, respectively. The
decrease was primarily due to a 6% increase in sales and a favorable product
mix. Operating costs associated with the Hotel during the third quarter of
fiscal 1997 and 1996 were $1,432,000 and $1,430,000, respectively.
General and administrative and selling expenses decreased $432,000 primarily
due to a cost reduction program in the Company's Danish subsidiary. Research
and product development expenses increased $633,000 primarily due to the
expanding engineering effort applicable to developing complex medical imaging
systems.
Computer software costs of $298,000 and $412,000 were capitalized in the
third quarter of fiscal 1997 and 1996, respectively. Amortization of
capitalized software amounted to $734,000 and $691,000 in the third quarter
of fiscal 1997 and 1996, respectively.
A gain on foreign exchange of $359,000 was realized during the third quarter
of fiscal 1997 versus $110,000 for the same period last year.
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, for the third quarter ended April 30, 1997 amounted to $445,000
compared to $29,000 for the third quarter ended April 30, 1996.
Minority interest in the net loss of the Company's consolidated subsidiary,
B&K, for the third quarter of fiscal 1996 was $509,000. As of July 1, 1996
the Company purchased the remaining 41% minority interest in B&K.
The Company's share of losses of a newly formed privately held company
amounted to $455,000 and $560,000 during the third quarter of fiscal 1997 and
1996, respectively.
The effective tax rate for the third quarter of fiscal 1997 was 28% vs. 26%
for the same period last year. The change in the rate was due to the
reduction in the utilization of tax credits.
Net income for the three months ended April 30, 1997 was $5,207,000 or $.41
per share as compared with $3,762,000 or $.30 per share for the same period
last year. As noted above the increase was caused primarily by higher sales
volume and gross margin.
<PAGE>
<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.
During the quarter ended April 30, 1997, the Company did not file any
reports on Form 8-K.
<PAGE>
<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 June 6, 1997 /s/ Bernard M. Gordon
Bernard M. Gordon
Chairman of the Board
Chief Executive Officer
Date June 6, 1997 /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
<PAGE>
<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 Nine Months Ended
April 30, April 30,
1997 1996 1997 1996
PRIMARY:
Net Income $5,207,000 $3,762,000 $13,720,000 $7,121,000
Average shares outstanding 12,551,560 12,473,857 12,519,546 12,445,250
Add: Incremental shares to
reflect dilutive stock
options deemed common
stock equivalents.
(Computed by treasury
stock method.) 170,412 77,270 167,086 102,945
Common and common equivalent
shares outstanding 12,721,972 12,551,127 12,686,632 12,548,195
Earnings per share $.41 $.30 $1.08 $.57
ASSUMING FULL DILUTION:
Net Income $5,207,000 $3,762,000 $13,720,000 $7,121,000
Average shares outstanding 12,551,560 12,473,857 12,519,546 12,445,250
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. 159,868 95,152 169,424 94,499
Average common shares
outstanding 12,711,428 12,569,009 12,688,970 12,548,749
Earnings per share $.41 $.30 $1.08 $.57
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The 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> 9-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> APR-30-1997
<CASH> 18995
<SECURITIES> 91168
<RECEIVABLES> 47781
<ALLOWANCES> 1869
<INVENTORY> 49706
<CURRENT-ASSETS> 210165
<PP&E> 135801
<DEPRECIATION> 88008
<TOTAL-ASSETS> 270556
<CURRENT-LIABILITIES> 30333
<BONDS> 0
0
0
<COMMON> 691
<OTHER-SE> 220230
<TOTAL-LIABILITY-AND-EQUITY> 270556
<SALES> 173069
<TOTAL-REVENUES> 185375
<CGS> 102164
<TOTAL-COSTS> 106593
<OTHER-EXPENSES> 56884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 489
<INCOME-PRETAX> 20351
<INCOME-TAX> 6086
<INCOME-CONTINUING> 13720
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13720
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.08
</TABLE>
