PEABODY, Mass., June 4, 2009 (GLOBE NEWSWIRE) -- Analogic Corporation (Nasdaq:ALOG), a leading designer and manufacturer of high-precision medical and security imaging equipment, today announced results for its third quarter ended April 30, 2009.
Highlights during the quarter included:
* Revenues of $93.6 million, down $9.1 million versus Q2 2009 * Net Income of $2.3 million, up $0.9 million from Q2 2009 * Earnings: -- GAAP: $0.18 per diluted share -- Non-GAAP: $0.24 per diluted share * Positive operating cash flows of $9.4 million * Orders totaling $16 million were received for airport security systems
Revenues for the third quarter ended April 30, 2009, were $93.6 million, compared with second quarter revenues of $102.7 million and the prior year's third quarter revenues of $102.8 million. Income from operations for the third quarter was $1.5 million compared with a loss of $1.5 million in the second quarter of fiscal 2009 and income of $7.7 million in the prior year's third quarter.
GAAP net income for the third quarter of fiscal 2009 was $2.3 million, or $0.18 per diluted share, compared with $1.4 million, or $0.11 per diluted share, in the second quarter and $6.7 million, or $0.50 per diluted share, for the prior year's third quarter.
On a non-GAAP basis, income from operations for the third quarter of fiscal 2009 was $3.3 million compared with $3.8 million in the second quarter and $9.4 million in the prior year. Non-GAAP net income for the third quarter was $3.1 million, or $0.24 per diluted share, compared with $3.4 million, or $0.27 per diluted share, in the second quarter and $8.0 million, or $0.59 per diluted share, for the prior year's third quarter.
Jim Green, President and CEO, commented, "Economic conditions continue to put pressure on capital equipment spending, affecting the demand for CT, MR, and motion control related systems. We expect these trends to continue through the next couple of quarters, however, we will continue to manage our business for profitability and positive cash flow."
Green continued, "As our customers optimize their R&D expenses, they are coming to us more often for the development of new products. This increasing interest in Analogic as a development and manufacturing partner for critical subsystems will continue to benefit us in the future."
Segment Revenues
Medical Imaging revenues were $50.0 million for the third quarter of fiscal 2009, down $11.8 million from the second quarter and down $8.5 million over the prior year's third quarter. Imaging System and Subsystem revenues were down during the third quarter due to continued weakness in the healthcare capital equipment market, driven by poor economic conditions, particularly in the United States. During the quarter we implemented a major OEM contract that has the one-time effect of delaying $3 million in revenue recognition and increasing finished-goods inventory. This contract will have a similar impact in Q4, at which point revenue recognition should return to normal run rates.
Digital Radiography revenues were $10.3 million for the third quarter of fiscal 2009, up $3.5 million from the second quarter and up $1.6 million over the prior year, driven by increasing sales of tomosynthesis-ready amorphous Selenium direct digital mammography detectors to a major medical OEM. We continue to expect long-term revenue growth in DR as our customers introduce their systems outside the U.S., and as they receive regulatory clearance to sell them within the U.S.
BK Medical revenues were $19.2 million for the third quarter of fiscal 2009, down $1.6 million from the second quarter and down $3.5 million from the prior year. Revenues were negatively impacted by currency exchange rates and the delay in customer orders in anticipation of the new Flex Focus(tm) scanner.
Security Technology revenues were $12.2 million for the third quarter of fiscal 2009, up $1.0 million from the second quarter and up $1.5 million from a year earlier. During the third quarter we received a $16 million order from L-3 Communications for eXaminer(r) 3DX and eXaminer SX systems, which will begin shipping in June 2009. This is the first order for the eXaminer SX since the U.S. Transportation Security Administration (TSA) certified the system in January.
Use of Non-GAAP Financial Measures
This document includes non-GAAP financial measures that are not in accordance with, nor an alternative to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on our reported results and, therefore, should not be relied upon as the sole financial measures to evaluate our financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. An explanation and a reconciliation of our non-GAAP measures are provided at the end of this press release.
Conference Call
Analogic will conduct an investor conference call on Thursday, June 4, at 5:00 p.m. (ET) to discuss the results for the third quarter. To participate in the conference call, dial 1-866-823-6992, or 1-334-323-7225 for international callers, approximately ten minutes before the conference is scheduled to begin. Inform the operator that you wish to join the Analogic conference, passcode 42748. You will then be asked for your name, organization, and telephone number, and be connected to the conference. The earnings release and presentation materials related to the quarterly financial information will be posted on the Company's website at www.analogic.com. The call will also be available via webcast in listen-only mode. To listen to the webcast, visit www.analogic.com approximately five to ten minutes before the conference is scheduled to begin.
A telephone digital replay will be available approximately two hours after the call is completed through midnight (ET) July 3, 2009. To access the digital replay, dial 1-877-919-4059, or 1-334-323-7226 for international callers. The passcode is 34657560. A replay of the conference call webcast will be archived on the Company's website at www.analogic.com approximately three hours after the call is completed and will be available through midnight (ET) Friday, July 3, 2009.
For more information on the conference call, visit www.analogic.com, call 978-326-4058, or email investorrelations@analogic.com
Forward-Looking Statements
Any statements about future expectations, plans, and prospects for the Company, including statements containing the words "believes," "anticipates," "plans," "expects," and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including risks relating to product development and commercialization, limited demand for the Company's products, risks associated with competition, uncertainties associated with regulatory agency approvals, competitive pricing pressures, downturns in the economy, the risk of potential intellectual property litigation, and other factors discussed in our most recent quarterly report filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this presentation represent the Company's views as of the date of this document. While the Company anticipates that subsequent events and developments will cause the Company's views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's views as of any later date.
About Analogic
Analogic Corporation is a growth oriented high-technology signal and image processing company, providing products and services to original equipment manufacturers (OEMs) and end users in growing medical diagnostics and security markets worldwide. The Company is recognized worldwide for advancing the state of the art in automatic explosives detection, computed tomography (CT), digital radiography (DR), ultrasound, magnetic resonance imaging (MRI), patient monitoring, and advanced signal processing. For more information, visit www.analogic.com
The Analogic Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6249
Consolidated Statements of Operations (GAAP)
(Unaudited)
Three Months Ended
------------------------------
Q3 09 Q2 09 Q3 08
Apr. 30, Jan. 31, Apr. 30,
(in thousands, except per share data) 2009 2009 2008
-------- -------- --------
Net revenue:
Products $ 86,864 $ 94,444 $ 98,167
Engineering 4,846 6,208 2,483
Other 1,883 2,063 2,118
-------- -------- --------
Total net revenue 93,593 102,715 102,768
-------- -------- --------
Cost of sales:
Products 55,908 61,822 60,525
Engineering 5,148 6,293 2,218
Other 1,576 1,697 1,693
-------- -------- --------
Total cost of sales 62,632 69,812 64,436
-------- -------- --------
Gross margin 30,961 32,903 38,332
-------- -------- --------
Operating expenses:
Research and product development 10,572 11,358 12,363
Selling and marketing 8,985 9,728 8,422
General and administrative 9,899 9,836 9,878
Restructuring charge -- 3,488 --
-------- -------- --------
Total operating expenses 29,456 34,410 30,663
-------- -------- --------
Income (loss) from operations 1,505 (1,507) 7,669
-------- -------- --------
Other income:
Interest income, net 531 767 1,640
Other (158) 464 230
-------- -------- --------
Total other income 373 1,231 1,870
-------- -------- --------
Income (loss) before income taxes 1,878 (276) 9,539
Provision (benefit) for income taxes (373) (1,695) 2,860
-------- -------- --------
Net income $ 2,251 $ 1,419 $ 6,679
======== ======== ========
Net income per share:
Basic $ 0.18 $ 0.11 $ 0.51
Diluted 0.18 0.11 0.50
Dividends declared per share $ 0.10 $ 0.10 $ 0.10
Weighted-average shares outstanding:
Basic 12,619 12,829 13,222
Diluted 12,691 12,876 13,318
Condensed Consolidated Balance Sheets GAAP
(Unaudited)
Q3 09 Q2 09 Q3 08
Apr. 30, Jan. 31, Apr. 30,
(in thousands) 2009 2009 2008
-------- -------- --------
Assets:
Cash, cash equivalents and
marketable securities $153,290 $147,848 $176,011
Accounts receivable, net 57,317 62,126 71,525
Inventories 82,519 81,648 81,618
Other current assets 25,713 26,420 16,793
-------- -------- --------
Total current assets 318,839 318,042 345,947
Property, plant and equipment, net 83,343 83,383 89,376
Other assets 56,106 56,478 71,054
-------- -------- --------
Total Assets $458,288 $457,903 $506,377
======== ======== ========
Liabilities and Stockholders' Equity:
Accounts payable $ 22,666 $ 24,437 $ 31,268
Accrued liabilities 26,369 25,168 29,247
Advance payments and
deferred revenue 8,409 10,943 10,529
Accrued income taxes -- -- 2,230
-------- -------- --------
Total current liabilities 57,444 60,548 73,274
-------- -------- --------
Long-term liabilities 6,755 7,573 8,669
-------- -------- --------
Stockholders' equity 394,089 389,782 424,434
-------- -------- --------
Total Liabilities and
Stockholders' Equity $458,288 $457,903 $506,377
======== ======== ========
UNAUDITED SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP MEASURES
The Company provides non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP income before income taxes, non-GAAP net income and non-GAAP diluted earnings per share as supplemental measures to GAAP regarding the Company's operational performance. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. The adjustments to these non-GAAP financial measures, and the basis for such adjustments, are outlined below:
Share-based compensation expense. The Company incurs expense
related to share-based compensation included in its GAAP
presentation of cost of sales, research and development, selling
and marketing, general and administrative expense. Although
share-based compensation is an expense of the Company and viewed
as a form of compensation, these expenses vary in amount from
period to period, and are affected by market forces that are
difficult to predict and are not within the control of
management, such as the market price and volatility of the
Company's shares, risk-free interest rates, and the expected term
and forfeiture rates of the awards. In accordance with SFAS No.
123(R), share-based compensation expense is calculated as of the
grant date of each share-based award, and generally cannot be
changed or influenced by management after the grant date.
Management believes that exclusion of these expenses allows
comparisons of operating results that are consistent between
periods and allows comparisons of the Company's operating results
to those of other companies that disclose non-GAAP financial
measures that exclude share-based compensation.
Acquisition related expenses. The Company incurs amortization of
intangibles and other expenses related to acquisitions it has
made in recent years. The intangible assets are valued at the
time of acquisition, are then amortized over a period of several
years after the acquisition and generally cannot be changed or
influenced by management after the acquisition. Management
believes that exclusion of these expenses allows comparisons of
operating results that are consistent over time for both our
newly acquired and long-held businesses.
Executive transition expenses. James W. Green was appointed as
our President and CEO on May 21, 2007. Since his arrival Mr.
Green made a number of changes in the senior leadership team
reporting to him. As such, the Company incurred charges for
severance, executive search, relocation and other related
expenses. Management believes these charges should be excluded
from the non-GAAP results because they were one-time items not
associated with the ongoing operations of the business.
Restructuring charge. The Company continuously strives to improve
its operating efficiency. During the three months ended January
31, 2009, the Company reduced its work force by 145 employees or
approximately 9% worldwide. The total cost of these activities
was $3,811,000 of which $3,488,000 was recorded as an operating
expense during the three months ended January 31, 2009. An
additional $323,000 was charged against restructuring accruals
previously recorded as part of the Copley acquisition. Management
believes that exclusion of these expenses allows for comparisons
of operating results that are consistent over time.
Taxes. For purposes of calculating non-GAAP net income and
non-GAAP diluted earnings per share, management adjusts the
provision (benefit) for income taxes to tax effect the non-GAAP
adjustments described above as they have a significant impact on
the Company's income tax provision (benefit). In addition, from
time-to-time, the Company recognizes certain non-recurring tax
adjustments. In the three months ended January 31, 2009, the
Company recorded $1,729,000 of discrete tax benefits of which
$1,232,000 related to an income tax refund for R&D tax credits
and $497,000 related the settlement of an income tax audit. In
the three months ended April 30, 2009, the Company recorded
$124,000 related to interest received on a tax refund. As these
adjustments do not reflect the underlying performance of the
business they have been excluded from Non-GAAP net income.
Management excludes the above-described expenses, their related tax impact and other non-recurring tax benefits in evaluating short-term and long-term operating trends in the Company's operations, and allocating resources to various initiatives and operational requirements. The Company believes that these non-GAAP financial adjustments are useful to investors because they allow investors to evaluate the effectiveness of the methodology and information used by management in its financial and operational decision-making.
These non-GAAP financial measures have not been prepared in accordance with GAAP, and should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. Further, these non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies.
The following table reconciles the non-GAAP financial measures to their most directly comparable GAAP financial measures. Non-GAAP Statement of Operations Reconciliation
Non-GAAP Statement of Operations Reconciliation
Three Months Ended
------------------------------
Q3 09 Q2 09 Q3 08
Apr. 30, Jan. 31, Apr. 30,
(in thousands, except per share data) 2009 2009 2008
-------- -------- --------
GAAP Gross Margin $ 30,961 $ 32,903 $ 38,332
Share-based compensation 69 64 40
Acquisition related expense 267 286 522
-------- -------- --------
Non-GAAP Gross Margin $ 31,297 $ 33,253 $ 38,894
======== ======== ========
Percent of Total Revenue 33.4% 32.4% 37.8%
GAAP Operating Expenses $ 29,456 $ 34,410 $ 30,663
Share-based compensation (1,019) (972) (784)
Executive transition -- -- (209)
Restructuring charge -- (3,488) --
Acquisition related expense (451) (451) (177)
-------- -------- --------
Non-GAAP Operating Expenses $ 27,986 $ 29,449 $ 29,493
Percent of Total Revenue 29.9% 28.7% 28.7%
GAAP Income (Loss) from Operations $ 1,505 $ (1,507) $ 7,669
Share-based compensation 1,088 1,036 824
Executive transition -- -- 209
Restructuring charge -- 3,488 --
Acquisition related expense 718 737 699
-------- -------- --------
Non-GAAP Income from Operations $ 3,311 $ 3,754 $ 9,401
Percent of Total Revenue 3.5% 3.7% 9.1%
GAAP Income Before Income Taxes $ 1,878 $ (276) $ 9,539
Share-based compensation 1,088 1,036 824
Executive transition -- -- 209
Acquisition related expense 718 737 699
Restructuring charge -- 3,488 --
-------- -------- --------
Non-GAAP Income Before Income Taxes $ 3,684 $ 4,985 $ 11,271
======== ======== ========
Percent of Total Revenue 3.9% 4.9% 11.0%
GAAP Net Income $ 2,251 $ 1,419 $ 6,679
Share-based compensation 517 884 724
Executive transition -- -- 132
Acquisition related expense 488 501 441
Restructuring charge -- 2,372 --
Significant non-recurring
tax items (a) (124) (1,729) --
-------- -------- --------
Non-GAAP Net Income $ 3,132 $ 3,447 $ 7,976
======== ======== ========
Percent of Total Revenue 3.3% 3.4% 7.8%
GAAP Diluted EPS $ 0.18 $ 0.11 $ 0.50
Effect of non-GAAP adjustments (a) 0.06 0.16 0.09
-------- -------- --------
Non-GAAP Diluted EPS (a) $ 0.24 $ 0.27 $ 0.59
======== ======== ========
(a) Non-GAAP diluted EPS for Q2 09 was revised to exclude $1.7M
($0.13 EPS) of non-recurring tax benefits.