Analogic Announces Results For The Third Quarter Ended April 30, 2017 And Declares Quarterly Cash Dividend

PEABODY, Mass., June 06, 2017 (GLOBE NEWSWIRE) -- Analogic Corporation (Nasdaq:ALOG), enabling the world's medical imaging and aviation security technology, today announced results for its third quarter ended April 30, 2017.         

Highlights during the third quarter (comparisons are against Q3 of fiscal 2016) included:

• Revenue of $122.2 million, down 5%
• Gross margin of 43%
• GAAP operating margin of (53%); Non-GAAP operating margin of 10%
• GAAP diluted EPS of ($4.78); Non-GAAP diluted EPS of $0.79
• Operating cash flow of $13 million with free cash flow of $11 million
• Non-cash asset impairment charge of $73 million for goodwill and intangibles in the Ultrasound business

Revenue for the third quarter of fiscal 2017 was $122.2 million compared with revenue of $128.0 million in the third quarter of fiscal 2016. GAAP net loss for the third quarter of fiscal 2017 was ($59.7) million, or ($4.78) per diluted share, compared with net income of $5.0 million, or $0.40 per diluted share, in the third quarter of fiscal 2016. Included in the GAAP net loss and diluted EPS for the third quarter of fiscal 2017 was a $2.1 million, or $0.11 per diluted share, restructuring charge due to severance expense associated with the previously announced 2017 Restructuring Plan. Also included in the GAAP net loss and EPS is a non-cash, pre-tax, asset impairment charge of $73.1 million, or $5.29 per diluted share, in the third quarter of fiscal 2017 due to the write-down of goodwill and intangibles in the Ultrasound business.

Non-GAAP net income for the third quarter of fiscal 2017, excluding the above-mentioned items, was $10.0 million, or $0.79 per diluted share, compared with $10.1 million, or $0.80 per diluted share, in the prior year's third quarter. A reconciliation of GAAP to non-GAAP results is included as an attachment to this press release.

For the first nine months of fiscal 2017, revenue totaled $374.8 million, up 1% from the same period in the prior year. Fiscal year-to-date GAAP net loss was ($49.6) million, or ($3.98) per diluted share, compared with net income of $3.4 million, or $0.27 per diluted share, from the same period in 2016. Included in GAAP net income and EPS for the first nine months of fiscal 2017 were restructuring charges of $2.4 million, or $0.12 per diluted share, for severance-related expenses and pre-tax asset impairment charges totaling $83.5 million, or $5.83 per diluted share, primarily associated with the write-down of goodwill and intangibles related to lower forecasted revenue in Ultrasound.  Included in GAAP net income and diluted EPS for year-to-date fiscal 2017 was a $10.2 million, or $0.52 per diluted share, benefit due to a contingent consideration adjustment associated with a decrease in forecasted revenues from the Oncura veterinary acquisition. Included in GAAP net income and diluted EPS for the first nine months of fiscal 2016 was a pre-tax accrual of $13.3 million, or $1.01 per diluted share, associated with the inquiry involving the company’s Danish subsidiary BK Medical and a pre-tax restructuring charge of $8.3 million, or $0.42 per diluted share. Year-to-date non-GAAP net income was $27.9 million, or $2.20 per diluted share, compared with $32.0 million, or $2.53 per diluted share, in the same period last year.

Fred Parks, president and CEO, commented, “Third-quarter results were in-line with expectations, nonetheless we are confident our performance will eventually benefit from the restructuring actions announced last quarter. As anticipated, revenues declined year over year due to lower revenue in our Ultrasound and Medical Imaging businesses. Our efforts in Ultrasound to optimize the product portfolio and reduce operating expenses are on track to be completed by fiscal year-end. We are driving solid performance in Security as we capitalize on continued demand for high-speed systems.

“During the quarter, Analogic incurred a significant asset impairment charge associated with the write-off of goodwill and intangibles in our Ultrasound business resulting from our revised revenue expectations for the general imaging product being offered by our technology partner and revenues from our Oncura veterinary business. Additional delays due to software development and new applications resulted in a reassessment of our long-term expectations for our general imaging product. Also, we have decided to discontinue further investment in our handheld Sonic Window platform. Our Ultrasound business is returning to our core of urology and surgical guidance with upside opportunities in point-of-care and eventually general imaging.”

Segment Revenues for the Third Quarter

Medical Imaging segment revenue was $69.5 million for the third quarter of fiscal 2017, down 5% from revenue of $72.9 million in the same period of fiscal 2016, due to lower revenues in CT and MRI, offset by favorable performance in Motion. Year-to-date Medical Imaging revenues were $209.0 million, down 1% from fiscal 2016.

Ultrasound segment revenue was $34.8 million for the third quarter of fiscal 2017, down 7% from revenue of $37.6 million in the same period of fiscal 2016, due to delays in general imaging system sales and lower point-of-care revenue, partially offset by growth in China and Europe distributors. Year-to-date Ultrasound revenues were $110.9 million, down 6% from last year.

Security and Detection segment revenue was $17.9 million for the third quarter of fiscal 2017, up 2% from revenue of $17.5 million, on continued demand for high-speed checked baggage screening systems. Year-to-date Security and Detection revenues were $54.9 million, up 31% from last year.

Fiscal 2017 Outlook
Total company revenue for fiscal 2017 is now expected to be down low to mid-single digits compared with fiscal 2016 with non-GAAP operating margins in the range of 8.5% – 9.5% resulting in non-GAAP earnings per share between $2.40 and $2.70.