PEABODY, Mass., Sept. 24, 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 fourth quarter and fiscal year ended July 31, 2009.
Highlights during the fourth quarter included:
* Revenues of $98.3 million, up $4.7 million versus Q3 2009 * Reported EPS: ($0.02) per diluted share; Adjusted non-GAAP EPS: $0.11 per diluted share * Recorded $3.1 million pre-tax restructuring charge ($2.0 million after tax) * Positive cash flow from operations of $7.9 million
Revenues for the fourth fiscal quarter ended July 31, 2009, were $98.3 million, compared with third quarter revenues of $93.6 million and the prior fiscal year's fourth quarter revenues of $117.1 million. Income (loss) from operations for the fourth quarter was ($2.6) million compared with income of $1.5 million in the third quarter of fiscal 2009 and income of $2.4 million in the prior year's fourth quarter. Reported results for the fourth quarter of fiscal 2009 included a charge of $3.1 million ($2.0 million after tax) due to restructuring expenses related to a reduction in force and downsizing of facilities. Reported net income (loss) for the fourth quarter of fiscal 2009 was ($0.3) million, or ($0.02) per diluted share, compared with income of $2.3 million, or $0.18 per diluted share, in the third quarter of fiscal 2009 and $3.3 million, or $0.25 per diluted share, for the prior year's fourth quarter.
On an adjusted, non-GAAP basis, income from operations for the fourth quarter of fiscal 2009 was $1.4 million compared with $3.3 million in the third quarter and $10.7 million in the prior year fourth quarter. Adjusted non-GAAP net income for the fourth quarter was $1.4 million, or $0.11 per diluted share, compared with $3.1 million, or $0.24 per diluted share, in the third quarter of fiscal 2009 and $7.2 million, or $0.55 per diluted share, for the prior year's fourth quarter. A reconciliation of GAAP to non-GAAP results is included as an attachment to this press release.
For fiscal 2009, revenues were $396.1 million, compared with revenues of $413.5 million in fiscal 2008. Reported net income for fiscal year 2009 totaled $3.7 million, or $0.29 per diluted share, as compared with net income of $23.5 million, or $1.77 per diluted share, for fiscal 2008.
"Fiscal 2009 was a challenging year due to the global economic conditions, however market conditions appear to have stabilized," commented Jim Green, president and CEO. "In addition to our Digital Radiography and Security businesses performing well through the downturn, our CT business is stabilizing, and we are seeing increased demand in MRI and especially in our end-user specialized ultrasound business."
Segment Revenues
Medical Imaging revenues were $51.2 million for the fourth quarter of fiscal 2009, up $1.2 million from the third quarter and down $16.2 million over the prior year's fourth quarter. Revenues were up slightly during the fourth quarter due to increased shipments of MRI and motion controls products. During the quarter, the Company completed its transition to consigned inventory per a major OEM contract which had the effect of delaying approximately $1.5 million of revenue and increasing finished goods inventory.
Digital Radiography revenues were $8.4 million for the fourth quarter of fiscal 2009, down $1.9 million from the third quarter and down $0.4 million over the prior year. The decrease in revenue was driven by the phasing out of non-mammography detectors as the Company continues to focus the business on the premium segment of Selenium based full field digital mammography detectors.
BK Medical revenues were $23.7 million for the fourth quarter of fiscal 2009, up $4.5 million from the third quarter and down $1.4 million from the prior year. The increase in revenue during the fourth quarter was due primarily to increasing demand for the new FlexFocus ultrasound scanner coupled with a $1.9 million international tender.
Security Technology revenues were $12.8 million for the fourth quarter of fiscal 2009, up $0.6 million from the third quarter and down $0.1 million from a year earlier. During the quarter, the Company shipped the first production eXaminer SX and received a contract from the Transportation Security Administration for the completion of the OnGuard DualUse system for both check-bag and check-point applications in smaller airports.
Use of Adjusted Non-GAAP Financial Measures
This document includes adjusted 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 adjusted non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Adjusted 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 adjusted 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 adjusted non-GAAP measures are provided at the end of this press release.
Conference Call
Analogic will conduct an investor conference call on Thursday, September 24, at 5:00 p.m. (ET) to discuss the results for the fourth 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) October 23, 2009. To access the digital replay, dial 1-877-919-4059, or 1-334-323-7226 for international callers. The passcode is 75343875. 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, October 23, 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), and advanced signal processing. For more information, visit www.analogic.com
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands,
except per
share data) Three months Ended Twelve months Ended
---------------------------- ------------------
July 31, April 30, July 31, July 31, July 31,
2009 2009 2008 2009 2008
-------- -------- -------- -------- --------
Net revenue:
Product $ 89,515 $ 86,864 $110,797 $365,770 $388,506
Engineering 6,543 4,846 3,362 21,090 14,089
Other 2,231 1,883 2,981 9,289 10,914
-------- -------- -------- -------- --------
Total net revenue 98,289 93,593 117,140 396,149 413,509
-------- -------- -------- -------- --------
Cost of sales:
Product 59,849 55,908 70,908 242,857 240,657
Engineering 6,767 5,148 3,686 21,398 14,480
Other 1,636 1,576 1,937 6,698 7,274
-------- -------- -------- -------- --------
Total cost of sales 68,252 62,632 76,531 270,953 262,411
-------- -------- -------- -------- --------
Gross margin 30,037 30,961 40,609 125,196 151,098
-------- -------- -------- -------- --------
Operating expenses:
Research and
product
development 10,779 10,572 13,544 45,276 48,947
Selling and
marketing 8,923 8,985 10,319 37,320 34,528
General and
administrative 9,803 9,899 10,282 40,166 39,296
Restructuring
and voluntary
retirement
charges 3,131 -- 4,016 6,619 4,016
-------- -------- -------- -------- --------
Total operating
expenses 32,636 29,456 38,161 129,381 126,787
-------- -------- -------- -------- --------
Income (loss)
from operations (2,599) 1,505 2,448 (4,185) 24,311
-------- -------- -------- -------- --------
Other income
(expense):
Interest
income, net 267 531 1,108 2,573 7,935
Gain on sale
of other
investments 815 -- 2,000 838 2,084
Other, net (1,152) (158) (291) (436) 715
-------- -------- -------- -------- --------
Total other
income (expense) (70) 373 2,817 2,975 10,734
-------- -------- -------- -------- --------
Income (loss)
before income
taxes (2,669) 1,878 5,265 (1,210) 35,045
Provision for
(benefit from)
income taxes (2,384) (373) 1,993 (4,915) 11,559
-------- -------- -------- -------- --------
Net income (loss) $ (285) $ 2,251 $ 3,272 $ 3,705 $ 23,486
======== ======== ======== ======== ========
Net income (loss)
per share:
Basic $ (0.02) $ 0.18 $ 0.24 $ 0.29 $ 1.78
Diluted $ (0.02) $ 0.18 $ 0.25 $ 0.29 $ 1.77
Dividends declared
per share $ 0.10 $ 0.10 $ 0.10 $ 0.40 $ 0.40
Weighted-average
shares
outstanding:
Basic 12,665 12,619 13,234 12,835 13,180
Diluted 12,665 12,691 13,352 12,932 13,290
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data) Q4 09 Q4 08
July 31, July 31,
2009 2008
-------- --------
Assets:
Cash, cash equivalents, and marketable
securities $160,293 $186,442
Accounts receivable, net 64,874 66,573
Inventories 79,011 79,197
Other current assets 20,113 28,714
-------- --------
Total current assets 324,291 360,926
Property, plant, and equipment, net 83,688 90,405
Other assets 56,135 59,834
-------- --------
Total Assets $464,114 $511,165
======== ========
Liabilities and Stockholders' Equity:
Accounts payable $ 22,064 $ 28,329
Accrued liabilities 30,868 34,552
Advanced payments and deferred revenue 7,219 10,785
-------- --------
Total current liabilities 60,151 73,666
-------- --------
Long-term liabilities 6,444 8,993
-------- --------
Stockholders' equity 397,519 428,506
-------- --------
Total Liabilities and Stockholders' Equity: $464,114 $511,165
======== ========
UNAUDITED SUPPLEMENTAL INFORMATION - RECONCILIATION OF GAAP TO NON-GAAP MEASURES
The Company provides adjusted non-GAAP gross margin, adjusted non-GAAP operating expenses, adjusted non-GAAP income from operations, adjusted non-GAAP income before income taxes, adjusted non-GAAP net income and adjusted 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 in fiscal 2008 for severance,
executive search, relocation and other related expenses. Management
believes these charges should be excluded from the adjusted non-
GAAP results because they were items not associated with the
ongoing operations of the business.
Restructuring and Voluntary Retirement charges. The Company
continuously strives to improve its operating efficiency. During
the three months ended July 31, 2009, the Company reduced its work
force by 85 employees or approximately 6% worldwide and vacated 50%
of its office facility in Canton, MA on July 31, 2009 as a result
of moving certain operations to our Peabody facility. The total
cost of these activities was $3,131,000, which was recorded as an
operating expense during the three months ended July 31, 2009.
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.
During the three months ended July 31, 2008, the Company offered a
one-time voluntary retirement program to certain eligible U.S.
employees. In addition, the Company terminated 32 employees in its
Peabody, Massachusetts facility. Total cost of these activities was
$4,016,000 in the three and twelve months ended July 31, 2008.
Management believes that exclusion of these expenses allows for
comparisons of operating results that are consistent over time.
Gain on sale of other investments. During the three months ended
July 31, 2009, the Company received $838,000 as the final escrow
payment related to the sale of its interest in Bio-Imaging Research
("BIR") was recorded as other income in the twelve months ended
July 31, 2009. During the three months ended October 31, 2007, the
Company received $84,000 as an initial escrow payment related to
the sale of its interest in BIR, which was recorded as other income
in the twelve months ended July 31, 2008. On December 7, 2007, the
Company received $555,000 from its insurance company as
reimbursement for legal fees incurred in relation to an
indemnification matter related to the Company's sale of its wholly
owned subsidiary Camtronics Medical Systems, Ltd. in November 2005.
The $555,000 gain was recorded as other income during the twelve
months ended July 31, 2008. On January 30, 2008, the Company agreed
to sell to Chonqing Anke Medical Equipment Co., 20% of its existing
45% equity interest (for a remaining interest of 25%) in Shenzhen
Anke High Tech Co. Ltd ("SAHCO") for aggregate compensation of
$2,000,000. The Company recognized a $2,000,000 gain in other
(income) expense during the three months ended July 31, 2008 when
the cash was received. These gains have been presented as a non-
GAAP item for the related periods as management believes they are
items not associated with the on-going operations of the business.
Taxes. For purposes of calculating adjusted non-GAAP net income and
adjusted 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).
Periodically, 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. In the three months
ended July 31, 2009, the company recorded $244,000 for a tax refund
and related interest. 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 STATEMENTS OF OPERATIONS RECONCILIATION
(In thousands,
except per
share data) Three months Ended Twelve months Ended
---------------------------- ------------------
July 31, April 30, July 31, July 31, July 31,
2009 2009 2008 2009 2008
-------- -------- -------- -------- --------
GAAP Gross Margin $ 30,037 $ 30,961 $ 40,609 $125,196 $151,098
Share-based
compensation
expense 58 69 78 272 213
Acquisition
related expenses 282 267 2,614 1,983 3,136
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Gross Margin $ 30,377 $ 31,297 $ 43,301 $127,451 $154,447
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue 30.9% 33.4% 37.0% 32.2% 37.4%
GAAP Operating
expenses $ 32,636 $ 29,456 $ 38,161 $129,381 $126,787
Share-based
compensation
expense (124) (1,019) (982) (3,696) (3,138)
Executive
transition
costs -- -- -- -- (627)
Restructuring
and voluntary
retirement
charges (3,131) -- (4,016) (6,619) (4,016)
Acquisition
related expenses (450) (451) (542) (1,799) (1,472)
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Operating Expenses $ 28,931 $ 27,986 $ 32,621 $117,267 $117,534
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue 29.4% 29.9% 27.8% 29.6% 28.4%
GAAP Income (Loss)
From Operations $ (2,599) $ 1,505 $ 2,448 $ (4,185) $ 24,311
Share-based
compensation
expense 182 1,088 1,060 3,968 3,351
Executive
transition costs -- -- -- -- 1,053
Restructuring
and voluntary
retirement
charges 3,131 -- 4,016 6,619 4,016
Acquisition
related expenses 732 718 3,156 3,782 4,182
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Income From
Operations $ 1,446 $ 3,311 $ 10,680 $ 10,184 $ 36,913
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue 1.5% 3.5% 9.1% 2.6% 8.9%
GAAP Other income
(expense) $ (70) $ 373 $ 2,817 $ 2,975 $ 10,734
Gain on sale
of other
investments (838) -- (2,000) (838) (2,639)
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Other income
(expense) $ (908) $ 373 $ 817 $ 2,137 $ 8,095
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue -0.9% 0.4% 0.7% 0.5% 2.0%
GAAP Income (Loss)
Before Income
Taxes $ (2,669) $ 1,878 $ 5,265 $ (1,210) $ 35,045
Share-based
compensation
expense 182 1,088 1,060 3,968 3,351
Executive
transition
costs -- -- -- -- 1,053
Restructuring
and voluntary
retirement
charges 3,131 -- 4,016 6,619 4,016
Acquisition
related expenses 732 718 3,156 3,782 3,483
Gain on sale
of other
investments (838) -- (2,000) (838) (1,940)
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Income Before
Income Taxes $ 538 $ 3,684 $ 11,497 $ 12,321 $ 45,008
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue 0.5% 3.9% 9.8% 3.1% 10.9%
GAAP Net Income
(Loss) $ (285) $ 2,251 $ 3,272 $ 3,705 $ 23,486
Share-based
compensation
expense 142 517 711 2,737 2,540
Executive
transition
costs -- -- -- -- 665
Restructuring
and voluntary
retirement
charges 1,962 -- 2,533 4,334 2,533
Acquisition
related expenses 357 488 1,990 2,383 2,637
Gain on sale
of other
investments (528) -- (1,261) (528) (1,664)
Tax refunds and
related interest (244) (124) -- (2,097) --
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Net Income $ 1,404 $ 3,132 $ 7,245 $ 10,534 $ 30,197
======== ======== ======== ======== ========
Percentage of
Total Net
Revenue 1.4% 3.3% 6.2% 2.7% 7.3%
GAAP Diluted Net
Income (loss) Per
Share $ (0.02) $ 0.18 $ 0.25 $ 0.29 $ 1.77
Effect of
non-GAAP
adjustments 0.13 0.06 0.30 0.52 0.49
-------- -------- -------- -------- --------
Adjusted Non-GAAP
Diluted Net Income
Per Share $ 0.11 $ 0.24 $ 0.55 $ 0.81 $ 2.26
======== ======== ======== ======== ========