Analogic Corporation Announces Financial Results For The Fourth Quarter And Fiscal Year Ended July 31, 2014 And Declares Quarterly Cash Dividend

PEABODY, Mass., Sept. 15, 2014 (GLOBE NEWSWIRE) -- Analogic Corporation (Nasdaq:ALOG), enabling the world's medical imaging and aviation security technology, today announced results for its fourth quarter ended July 31, 2014.

Highlights during the fourth quarter (comparisons are against Q4 of fiscal 2013) included:

• Revenue of $142 million, down 15%
• Gross margin of 44%, up 4 points
• GAAP operating margin of 8%; Non-GAAP operating margin of 14%
• GAAP diluted EPS of $0.89; Non-GAAP diluted EPS of $1.36
• Entered into an agreement with a significant medical equipment supplier to provide our advanced ultrasound technology beyond our core markets
• After quarter end, Security backlog increased to over $60 million and introduced new bk3000™ premium ultrasound system

Highlights for fiscal year 2014 included:

• Revenue of $518 million, down 6% from fiscal 2013
• Gross margin of 42%, up 3 points
• GAAP operating margin of 6%: Non-GAAP operating margin of 10%
• GAAP diluted EPS of $2.72; Non-GAAP diluted EPS of $3.52
• Positive operating cash flows of $48 million, free cash flow of $30 million

Revenue for the fourth quarter of fiscal 2014 was $142.0 million, a decrease of 15% compared with revenue of $166.2 million in the fourth quarter of fiscal 2013. GAAP net income for the fourth quarter of fiscal 2014 was $11.2 million, or $0.89 per diluted share, compared with net income of $11.7 million, or $0.93 per diluted share, in the fourth quarter of fiscal 2013.

Non-GAAP net income for the fourth quarter was $17.2 million, or $1.36 per diluted share, compared with $19.3 million, or $1.53 per diluted share, in 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 2014, revenue totaled $517.5 million, down 6% from the same period in the prior year. GAAP net income for the fiscal year was $34.5 million, or $2.72 per diluted share, compared with $31.1 million, or $2.48 per diluted share, in fiscal 2013. GAAP net income for fiscal 2014 included favorable discrete net tax benefits totaling $8.8 million, or $0.69 per diluted share, primarily associated with a reduction in taxes expected to be payable in the future associated with our Canadian operations. Non-GAAP net income for the fiscal year was $44.6 million, or $3.52 per diluted share, compared with $48.8 million, or $3.88 per diluted share, in fiscal 2013. Our non-GAAP results do not include the tax benefit noted above.

Jim Green, president and CEO, commented, "Despite market challenges in both the medical and security markets, for the fiscal year we generated significant operating cash flow and maintained near record margins, positioning Analogic for growth and significant profitability in the future. In Medical Imaging, our new high-value-content CT platform is entering production and our MRI and Mammography businesses are stable. In Security, our baggage screening products are proven, our market position with L-3 Communications and Smiths Detection remains strong, and we are seeing early adoption for RapidDNA Analysis™ Systems. After the end of the quarter we received significant orders for threat detection and DNA analysis systems increasing our Security backlog to over $60 million, positioning us well for fiscal 2015."

"In direct Ultrasound, our sales force is stabilizing and we recently introduced our new bk3000 system, a premium ultrasound solution for urology and general imaging, positioning us for accelerating growth," Green added. "We are pleased to mention that during the fourth quarter we entered into an agreement with a significant global medical equipment provider that will allow us to leverage our new TriCore™ based ultrasound technology beyond our core markets. We expect to see shipments beginning in fiscal 2015 underpinning our long-term growth expectations for our Ultrasound business."

Green continued, "We believe that fiscal 2015 will see a return to growth as our Medical Imaging business stabilizes, our Ultrasound business accelerates in direct markets and Security sees strong growth. We expect revenues in fiscal 2015 to grow mid single-digits with 1-2 points improvement in non-GAAP operating margin, putting us back on a trajectory of long-term sustainable growth."

Segment Revenues

Medical Imaging segment revenue was $84.2 million for the fourth quarter of fiscal 2014, down 7% from the same period of fiscal 2013, due primarily to timing of MRI sales, lower customer funded engineering and the exit from our legacy patient monitoring product line. In the fiscal year, Medical Imaging revenue was $295.6 million, down 7% from the prior year.

Ultrasound segment revenue was $40.4 million for the fourth quarter of fiscal 2014, down 8% from revenue of $43.7 million in the same period of fiscal 2013, due to fulfillment delays related to timing of orders received during the quarter. In the fiscal year, Ultrasound revenue was $152.5 million, up 2% from the prior year.

Security Technology segment revenue was $17.4 million for the fourth quarter of fiscal 2014, down 46% from revenue of $32.3 million in the same period of fiscal 2013. Compared with a very strong fourth quarter of fiscal 2013, revenues in the fourth quarter of fiscal 2014 were lower as a result of a reduction in engineering revenue and fewer shipments of high-speed threat detection systems primarily due to international airport tender delays. In the fiscal year, Security Technology revenue was $69.4 million, down 15% from the prior year.

Quarterly Cash Dividend

On September 9, 2014, Analogic's Board of Directors declared a $0.10 cash dividend for each common share for its fourth fiscal quarter ended July 31, 2014. The cash dividend will be payable on October 10, 2014, to shareholders of record on September 25, 2014.

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.

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