Analogic Announces Results for the First Quarter Ended October 31, 2017 and Declares Quarterly Cash Dividend

Operating Expense Reductions in Fiscal 2017 Yield Improved Profitability; Tightens Guidance Range for Fiscal 2018 on Increased Confidence

Peabody, Massachusetts, UNITED STATES

PEABODY, Mass., Dec. 06, 2017 (GLOBE NEWSWIRE) -- Analogic Corporation (Nasdaq:ALOG), enabling the world's medical imaging and aviation security technology, today announced results for its first quarter ended October 31, 2017.    

Highlights during the first quarter included:

• Revenue of $106.9 million with gross margin of 45%
• GAAP operating margin of 7%; Non-GAAP operating margin of 12%
• GAAP diluted EPS of $0.45; Non-GAAP diluted EPS of $0.75
• Operating cash flow of $14 million
• Awarded $4 million base contract by TSA for software algorithm development and additional ConneCT prototypes

Revenue for the first quarter of fiscal 2018 was $106.9 million, a decrease of 12% compared with revenue of $121.1 million in the first quarter of fiscal 2017. GAAP net income for the first quarter of fiscal 2018 was $5.7 million, or $0.45 per diluted share, compared with net income of $2.5 million, or $0.20 per diluted share, in the first quarter of fiscal 2017. Non-GAAP net income for the first quarter of fiscal 2018 was $9.5 million, or $0.75 per diluted share, compared with $5.4 million, or $0.43 per diluted share, in the prior year's first quarter. A reconciliation of GAAP to non-GAAP results is included as an attachment to this press release.

Fred Parks, president and CEO, commented, “We are encouraged by our results this quarter as our strategy to optimize our Ultrasound portfolio is showing promise. As expected, our strategic redirection coupled with our fiscal 2017 restructuring has yielded improved profitability in Q1 on a lower revenue base. Security continues to show strength in the second half of the year driven by demand for international high-speed checked baggage systems and the recent TSA checkpoint contract.”

Parks continued, “The strategic sale process, as previously announced, is progressing as planned. We will provide updates as appropriate.” 

Segment Revenues for the First Quarter
Medical Imaging segment revenue was $53.1 million for the first quarter of fiscal 2018, down 21% from revenue of $67.2 million in the same period of fiscal 2017, primarily due to lower sales in CT associated with previously reported customer sourcing issues combined with lower sales in MR and Mammography.

Ultrasound segment revenue was $37.4 million for the first quarter of fiscal 2018, up 4% from revenue of $35.8 million in the same period of fiscal 2017, due to the stronger sales of our bk5000 system for surgery in North America and Europe partially offset by the comparative lower revenue from Oncura veterinary system sales.

Security and Detection segment revenue was $16.4 million for the first quarter of fiscal 2018, down 10% from revenue of $18.1 million in the same period of fiscal 2017, mainly due to a stronger comparison from last year and lower service revenue.

Fiscal 2018 Outlook
Total company revenue for fiscal 2018 is expected to be between $450 and $460 million with non-GAAP operating margins of 10% to 11% resulting in non-GAAP diluted EPS of $2.75 to $2.90. We expect sequential revenue improvement throughout the remainder of fiscal 2018.

  • With anticipated reductions from our portfolio optimization efforts partially offset by improved performance in our urology and surgery markets, we now expect our Ultrasound revenue for fiscal 2018 to be down low-single digits with positive low-single digit non-GAAP operating margin as the company realizes the benefit of its product portfolio optimization efforts and lower operating expenses
  • Medical Imaging revenue for fiscal 2018 is expected to be down low-double digits with mid-teens non-GAAP operating margin due primarily to the impact of a customer outsourcing decision in CT
  • Security and Detection revenue for fiscal 2018 is expected to have double-digit growth, with mid-teens non-GAAP operating margin on continued demand for medium-speed and high-speed check baggage screening systems

The Company does not provide a GAAP operating margin and earnings outlook because it is unable to reliably forecast many of the items that are excluded from the calculation of non-GAAP operating margin and earnings. These items could cause our GAAP operating margins and earnings to differ materially from the corresponding non-GAAP values. For more information, see “Use of Non-GAAP Financial Measures,” below.

Quarterly Cash Dividend   
On December 1, 2017, Analogic's Board of Directors declared a $0.10 cash dividend for each common share for its fourth fiscal quarter ended October 31, 2017. The cash dividend will be payable on December 29, 2017, to shareholders of record on December 15, 2017.

Use of Non-GAAP Financial Measures
We supplement our GAAP financial reporting with certain non-GAAP financial measures, including non-GAAP operating income, non-GAAP operating margin, non-GAAP other income and expense, non-GAAP net income, non-GAAP effective tax rate and non-GAAP diluted earnings per share. These measures are not presented in accordance with, nor are they a substitute for, U.S. generally accepted accounting principles, or GAAP. In addition, these measures may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. The non-GAAP financial measures should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. We have included at the end of this document a reconciliation of each historical non-GAAP financial measure used in this document to the most directly comparable GAAP financial measure.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, in forecasting and planning for future periods, and in determining payments under our compensation programs. We also believe that non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results and in comparing financial results across accounting periods and to those of other companies.

With respect to forwarding-looking measures, we provide an outlook for our non-GAAP operating margins and earnings. We do not provide operating margin or earnings outlook on a GAAP basis. Many of the items that we exclude from our non-GAAP operating margin and earnings calculations, such as amortization of intangibles, acquisition related costs, restructuring expenses, and one-time tax adjustments, are less capable of being controlled or reliably predicted by management. These items could cause our GAAP operating margins and earnings to vary materially from the corresponding Non-GAAP figures presented in our outlook statements.

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, limited number of customers, risks associated with competition, uncertainties associated with regulatory agency approvals, competitive pricing pressures, downturns in the economy, the risk of potential intellectual property litigation, acquisition related risks, and other factors discussed in our most recent quarterly and annual reports 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.

Conference Call Details
Analogic will conduct an investor conference call on Wednesday, December 6, 2017 at 5:00 p.m. (ET) to discuss the first quarter results and outlook for fiscal 2018. 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, just prior to the call, presentation materials related to the quarterly financial information will be posted on the Company’s website at

The call will also be available via webcast in listen-only mode. To listen to the webcast, visit 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 Saturday, January 6, 2018. To access the digital replay, dial 1-877-919-4059 or 1-334-323-0140 for international callers. The passcode is 13740288.

A replay of the conference call webcast will be archived on the Company's website at approximately three hours after the call is completed and will be available through midnight January 6, 2018. For more information on the conference call, visit, call 978-326-4058, or email

About Analogic – Celebrating 50 Years of Imaging Innovation
Analogic (Nasdaq:ALOG) provides leading-edge healthcare and security technology solutions to advance the practice of medicine and save lives. We are recognized around the world for advanced imaging and real-time guidance technologies used for disease diagnosis and treatment as well as for automated threat detection. Our market-leading ultrasound systems, led by our flagship BK Ultrasound brand, used in procedure-driven markets such as urology, surgery, and point-of-care, are sold to clinical practitioners around the world. Our advanced imaging technologies are also used in computed tomography (CT), magnetic resonance imaging (MRI), and digital mammography systems, as well as automated threat detection systems for aviation security. Analogic is headquartered just north of Boston, Massachusetts. For more information, visit

Analogic and the globe logo are registered trademarks of Analogic Corporation.

   Three Months Ended
(In thousands, except per share data)  October 31, 2017  October 31, 2016
Net revenue:      
Product   $  105,752  $   120,245
Engineering     1,123    873
Total net revenue     106,875    121,118
Cost of sales:      
Product     57,972    68,759
Engineering     1,136    723
Total cost of sales     59,108    69,482
Gross profit    47,767    51,636
Operating expenses:      
Research and product development     15,012    15,850
Selling and marketing     12,405    18,180
General and administrative     11,941    13,621
Restructuring     535    32
Total operating expenses     39,893    47,683
Income from operations     7,874    3,953
Total other income (expense), net    238    (442)
Income before income taxes     8,112    3,511
Provision for income taxes     2,453    980
Net income   $   5,659  $   2,531
Net income per share      
Basic   $   0.45  $   0.20
Diluted   $   0.45  $   0.20
Dividends declared and paid per share  $   0.10  $   0.10
Weighted-average shares outstanding:      
Basic     12,473    12,419
Diluted     12,599                       12,616

(In thousands)      
Assets:  October 31, 2017  July 31, 2017
Cash and cash equivalents  $   96,806 $   129,298
Short-term marketable securities    50,555    18,797
Accounts receivable, net    73,111    77,587
Inventory    131,314    130,575
Other current assets    12,429    14,448
Total current assets    364,215    370,705
Long-term marketable securities    35,539    26,171
Property, plant, and equipment, net    100,302    102,676
Intangible assets and goodwill, net    26,950    28,269
Other non-current assets    10,325    10,262
Total Assets  $   537,331 $   538,083
Liabilities and Stockholders' Equity:      
Accounts payable  $   25,728 $   27,179
Accrued liabilities    28,034    31,620
Other current liabilities    8,802    8,311
Total current liabilities    62,564    67,110
Long-term liabilities    10,133    10,479
Stockholders' equity    464,634    460,494
Total Liabilities and Stockholders' Equity  $   537,331 $   538,083

(In thousands, except per share data) Three Months Ended 
  October 31, 2017  October 31, 2016 
GAAP Income From Operations$   7,874 $   3,953 
Share-based compensation expense (Note 1)   1,984    1,563 
Acquisition-related revenues and expenses (Note 2)   1,462    2,212 
Non-routine other legal costs (Note 3)   577    4 
Restructuring (Note 4)   535    32 
Non-GAAP Income From Operations$   12,432 $   7,764 
Percentage of Total Net Revenue 11.6%  6.4% 
GAAP  Tax Provision (Note 5)$   2,453 $   980 
GAAP Tax Rate 30.2%  27.9% 
Non-GAAP  Tax Provision (Note 5)   3,171    1,950 
Non-GAAP Tax Rate 25.0%  26.6% 
GAAP Net Income$   5,659 $  2,531 
Share-based compensation expense (Note 1)   1,885    1,066 
Acquisition-related revenues and expenses (Note 2)   1,114    1,752 
Non-routine other legal costs (Note 3)   365    2 
Restructuring (Note 4)   358    21 
Asset impairment charges   28    - 
Valuation Allowance Tax Effect   89    - 
Non-GAAP Net Income$   9,498 $   5,372 
Percentage of Total Net Revenue 8.9%  4.4% 
GAAP Diluted EPS$  0.45 $   0.20 
Effect of non-GAAP adjustments$   0.30 $   0.23 
Non-GAAP Diluted EPS$   0.75 $   0.43 
Note 1: Exclusion of variable share-based compensation expense allows consistency of operating results between periods and other companies. 
Note 2: During fiscal years 2017 and 2018, we incurred acquisition costs related to the Ultrasonix Medical Corporation, PocketSonics, Inc., and Oncura Partners Diagnostics, LLC acquisitions, which we closed on March 2, 2013, September 20, 2013, and January 8, 2016, respectively. Costs included theamortization of intangibles of $1.5 million for the three months ended October 31, 2017. 
Note 3: During the three months ended October 31, 2017, we incurred $577 thousand of pre-tax strategic alternative related costs.  Additionally, during the three months ended October 31, 2017, we incurred $0 of pre-tax inquiry-related costs, associated with the BK matter, as initially disclosed in our annual report on Form 10-K for the fiscal year ended July 31, 2011. This matter relates to transactions we identified involving our Danish subsidiary, BK Medical, and certain of its foreign distributors, regarding compliance with the law. 
Note 4: During the three months ended October 31, 2017, we incurred pre-tax charges of $535 thousand, primarily due to facility exit costs associated with exiting the Vancouver facility.   
Note 5: The quarter to date Q1 FY 2018 non-GAAP tax rate differs from the GAAP tax rate primarily due to acquisition related adjustments and stock compensation expenses.  The quarter to date Q1 FY 2017 non-GAAP tax rates differ from the GAAP tax rates primarily due to the BK Matter Inquiry costs and by acquisition related amortization expense and stock compensation expenses. 

For Further Information:

Investor and Financial Media Contact:
Mark Namaroff
Senior Director of Investor Relations and Corporate Communications
(978) 326-4058