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1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the fiscal year ended: July 31, 1996 or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from to
Commission file number: 0-6715
ANALOGIC CORPORATION
(Exact name of registrant as specified in its charter
Massachusetts 04-2454372
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8 Centennial Drive, Peabody, Massachusetts 01960
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 977-3000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.05 par value
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant at August 30, 1996 was approximately
$193,146,060.
Number of shares of Common Stock outstanding at August 30, 1996: 12,500,291
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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PART I
Item 1. Business
(a) Developments During Fiscal 1996
Total revenues of Analogic Corporation (hereinafter, together with its
subsidiaries, referred to as "Analogic" or the "Company") for the fiscal year
ended July 31, 1996, were $230,460,000 as compared to $208,827,000 for
fiscal year 1995, an increase of 10%. Net income was $13,065,000, or
$1.04 per share as compared to $12,706,000, or $1.02 per share for fiscal
year 1995.
During June, 1995, the Company loaned Park Meditech, Inc. ("Park")
$1,500,000, structured as a Convertible Subordinated Promissory Note, with
interest at 8%, payable quarterly, and principal due on or before June 1,
1996. This note was convertible, at the option of the Company, into 600,000
common shares of Park stock until June 1, 1996. In addition, the Company
had warrants convertible to 200,000 common shares of Park stock at a price
of $2.50 (US) until June 1, 1997.
On February 13, 1996, the Company acquired 1,715,384 shares of Park
Common Stock and an 11% Convertible Unsecured Subordinated Debenture
in the principal amount of $750,000 in consideration of the cancellation of
the Convertible Subordinated Promissory Note in the amount of $1,500,000
and 200,000 Common Share purchase warrants. With certain restrictions,
the Convertible Unsecured Subordinated Debenture may be converted into
Common Shares at a price of $1.20 (Canadian) per Common Share. The
Company currently owns 5,715,384 shares or approximately 14% of the
outstanding shares of Park.
On February 22, 1996, the Company invested $2,000,000 for a 33%
interest in a newly formed privately held company which will design and
manufacture subassemblies for medical imaging equipment.
On July 1, 1996, the Company acquired the remaining 41% minority
interest in B&K Ultrasound Systems A/S ("B&K") for $3,416,000 in cash.
The Company now owns 100% of the outstanding shares of B&K.
(b) Financial Information About Industry Segment
The Company's operations are within a single segment within the
electronics industry: the design, manufacture and sale of high-technology,
high-performance, high-precision, data acquisition, conversion
(analog/digital) and signal processing instruments and systems.
(c) Narrative Description of Business
Analogic designs, manufactures and sells standard and customized
high-precision data acquisition, conversion and signal processing equipment.
Analogic's principal customers are original equipment manufacturers who
incorporate Analogic's state-of-the-art products into systems used in medical,
industrial and scientific applications.
3
Analogic is a leader in precision analog-to-digital (A/D) and
digital-to-analog (D/A) conversion technology, which involves the conversion
of continuously varying (i.e., "analog") electrical signals, such as those
representing temperature, pressure, voltage, weight, velocity, ultrasound and
x-ray intensity into and from the numeric (or "digital") form required by
computers, medical imaging equipment and other data processing equipment
and in subsystems and systems based on such technology.
In addition to their A/D and D/A conversion capabilities, most of
Analogic's products perform calculations on the data being analyzed. Thus,
Analogic's products are an integral part of the communications link between
various analog sensors, detectors or transducers and the people or systems
which interpret or utilize this information.
Analogic's products may be divided for discussion purposes into three
groupings as described below. These products are classified by product
technology and not by application.
Signal Processing Technology Products, consisting of A/D and D/A
converters and supporting modules, high-speed digital signal processors such
as Array Processors, and image processing equipment, accounted for
approximately 20% of fiscal 1996 product, service, engineering, and
licensing revenue.
The technology developed by Analogic and incorporated within these
products is fundamental to all of the Company's other products.
A/D converters convert continuously varying "analog" signals into the
numerical "digital" form required by microprocessors and other data
processing equipment. D/A converters transform computer output in digital
form into the analog form required by process control equipment. Analogic
manufactures a wide variety of interconnecting and supporting modules
relating to its A/D and D/A converters. These include signal conditioning
devices, which amplify, isolate and filter physical analog signals;
multiplexing devices, which permit simultaneous processing of a number of
analog signals; and sample and hold devices, which sample rapidly varying
phenomena.
Analogic specializes in the manufacture of high-precision and high
performance, rather than lower-cost, low-precision and minimal performance,
data conversion products. Typical applications of these devices include the
conversion of industrial and biomedical signals into computer language.
The Company also manufactures a line of PC/AT-class high performance
data acquisition cards. These plug-in cards provide personal computer users
with unprecedented data throughput and flexibility. The series of cards has
a library of high level software applications supported by third-party software
houses and proprietary set-up and diagnostic software.
The Company also manufactures a line of high performance data
acquisition products for the PC 104 market. Designed for embedded
processor applications normally used in OEM products, these cards provide
precision measurement capability between real world signals and the
measuring instrument while meeting all of the requirements of the PC 104
form factor and bus structure.
4
Analogic manufactures application accelerator and array processors
(special purpose computers) which generally receive information from a host
computer or data source, rapidly perform the desired calculations, and return
the processed data or results to the host computer. The cost per calculation
of array processors, which can compute and/or manipulate data at the rate of
hundreds of millions of operations per second, is less than that of general
purpose computers. Analogic believes its accelerators and array processors
have generally been cost effective when compared with competitive products.
The Company is marketing its array processors for applications such as
geophysical exploration, speech processing, X-ray imaging, manufacturing
testing, and other technical and scientific areas. In addition, the Company
sells array processors used for image construction in Magnetic Resonance
Imaging (MRI) medical diagnostic systems. The Company also manufactures
Digital Signal Processing (DSP) floating point products which are used in the
above mentioned markets.
Medical Technology Products, consisting primarily of electronic
subsystems for medical imaging equipment, accounted for approximately
71% of product, service, engineering, and licensing revenue in fiscal 1996.
Analogic's medical imaging data acquisition systems and related
computing equipment are incorporated by U.S., European and Asian
manufacturers into advanced X-ray equipment known as computer assisted
tomography (CAT) scanners. These scanners generate images of the internal
anatomy which are used primarily in diagnosing medical conditions.
Analogic's data acquisition and signal processing systems have advanced
CAT scanner technology by substantially increasing resolution of the image,
by reducing the time necessary to acquire the image, and by reducing the
computing time required to produce the image. Analogic supplies to its
medical imaging customers A/D and D/A conversion equipment and complete
data acquisition systems. The Company has completed the design of a
complete low cost CAT scanner, incorporating proprietary technology. The
Company commenced manufacturing this scanner in January, 1996 and is
selling on an OEM basis to medical equipment companies.
In addition, the Company manufactures phased array ultrasound systems,
key subsystems, and a family of transducers on an OEM basis for ultrasound
equipment manufacturers. The Company also designs and manufactures
radiology, surgical, and urology ultrasound equipment for the end-user
market.
The Company manufactures electronics for a family of hard copy laser
printers in single and multi-user configurations that address the diagnostic
image market. These printers are used in hospitals world wide to print
diagnostic quality images on film from the electronic data collected by
medical imaging equipment such as CAT scanners and MRI scanners. The
Company also designs and manufactures for OEM customers advanced RF
amplifiers, gradient coil amplifiers, and spectrometers for use in MRI
equipment. These MRI scanners are used primarily to create diagnostic
medical images.
The Company manufactures fetal monitoring products for conversion and
display of biomedical signals. These monitors designed for use in both
antepartum and intrapartum applications have the capability to measure,
compute, display and print fetal and maternal heart rates, maternal
contraction frequency and relative intensity and other maternal vital sign
parameters to determine both maternal and fetal well being.
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The Company recently commenced manufacturing a lightweight portable
multi-functional custom patient monitor instrument that acquires, calculates
and displays the five most common vital sign parameters.
The Company also manufactures a broad line of medical connectivity
products that allows medical equipment such as CAT Scanners and MRI and
ultrasound equipment to attach to local DICOM, PACS and wide area
networks.
The products manufactured by Camtronics, a 68% owned subsidiary, are
included herein as medical technology products. It designs and manufactures
state-of-the-art image processing products for diagnostic and interventional
applications in cardiac catheterization laboratories and for other radiology
procedures. They also manufacture the ArchiumTM Cardiac Digital Archive
System that stores and displays in real time images from cardiac labs at
multiple locations.
Industrial Technology Products, consisting of digital panel instruments,
industrial data acquisition and conversion systems, and test and measurement
devices and automation systems, accounted for approximately 9% of fiscal
1996 product, service, engineering, and licensing revenue.
Digital panel instruments measure analog inputs and visually display the
result in numerical (digital) form. They are sold to original equipment
manufacturers to be incorporated in products such as precision thermometers,
blood analyzers, and automatic test equipment. Certain of Analogic's digital
panel instruments incorporate specialized signal conditioning and computing
capabilities, and can transmit the measured value in digital form to remote
displays or to computers. The Company's Monitroller line of products
extends this capability still further by functioning as single loop process
controllers.
Industrial digitizing systems condition analog signals, translate them to
digital form with a high degree of precision, and perform subsequent
computations and calculations. These instruments are available as complete
standard instruments or are customized to particular applications for
incorporation into customers' products. Typical applications for these
systems are in static and dynamic weighing, measurement of pressure, force
or temperature, and engine power measurement as well as factory-wide
Distributed Control Systems.
Analogic's products also include a large number of standard and
customized A/D and D/A systems which can accept up to several thousand
channels of signals, perform precise signal conditioning, translate the data
into digital format and process the information via computer. Certain of the
customized subsystems include computing or computer-interfacing sub-units.
The Company manufactures complete data acquisition and conversion
systems used in a wide variety of industrial applications from process control
to emergency recording systems used in nuclear power plants. Also, a
family of high speed, 16-bit, multichannel data acquisition boards has been
designed to meet the stringent demands of fast and accurate measurements in
precision instrumentation environments.
6
Incorporating much of the same technology as the Company's medical
equipment, our sophisticated test instruments include general purpose digital
multimeters, which measure the basic parameters as voltage, current and
resistance, as well as temperature and frequency. The Company's universal
waveform analyzer line combines the features of a digital storage
oscilloscope, spectrum analyzer, array processor, and computer. The
Company is also a supplier of power supply test systems, static and dynamic
loads, and AC sources used for testing power supplies and other power
devices.
The Company manufactures telecommunications products for use in
network monitoring and fault reporting. In addition, original equipment
manufacturers (OEM) purchase the Company's standard A/D, D/A and
digital signal processing products for specific production testing of
telecommunications equipment. The Company also manufactures a line of
high performance digital signal processor (DSP) boards used in the telephony
industry.
Marketing and Distribution
The Company sells its products domestically and abroad directly through
the efforts of its officers and employees and through a network of
independent sales representatives and distributors located in principal cities
around the world. In addition, Analogic subsidiaries act as its distributors
in England and Denmark. Domestically, Analogic has several regional sales
offices staffed by salespeople who sell the Company's products in the
surrounding areas and supervise independent sales representatives and
distributors in their regions. Some of Analogic's distributors also represent
manufacturers of competing products.
Sources of Components/Raw Materials
In general, Analogic's products are composed of company-designed
proprietary integrated circuits, printed circuit boards, and precision resistor
networks, all manufactured by others in accordance with Analogic's
specifications, as well as standard electronic integrated circuits, transistors,
displays and other components. Most items procured are believed to be
available from more than one source. However, it may be necessary, if a
given component ceases to be available, for Analogic to incur additional
expense in order to modify its product design to adapt to a substitute
component or to purchase new tooling to enable a new supplier to
manufacture the component. Also, from time to time the availability of
certain electronic components has been disrupted. Accordingly, Analogic
carries a substantial inventory of raw material components in an effort to
assure its ability to make timely delivery to its customers.
Patents and Licenses
The Company owns, or is licensee of, a number of patents of varying
durations. In the opinion of management, Analogic's present position and its
future prospects are a function of the level of excellence and creativity of its
engineers; patent protection is useful but of secondary importance.
Management is of the opinion that the loss of patent protection would not
have a material effect on the Company's competitive position.
7
Seasonal Aspect of Business
There is no material seasonal element to the Company's business,
although plant closings in the summer, particularly in Europe, tend to
decrease the activity of certain buying sources during the first quarter of
the Company's fiscal year.
Working Capital Matters
The Company does not carry a substantial inventory of finished goods but
does carry a substantial inventory of raw material components and
work-in-process to enable it to meet its customers' delivery requirements.
(See Note 4 of Notes to Consolidated Financial Statements.)
Material Customers
The Company's three largest customers, each of which is a significant and
valued customer, were Siemens, a major German manufacturer of electronic
and electrical equipment; Phillips and 3M/Imation, which accounted for
approximately 14.0%, 9.7%, and 8.8%, respectively, of product, service,
engineering, and licensing revenue for the fiscal year ended July 31, 1996.
Loss of any one of these customers would have a material adverse effect
upon the Company's business. Siemens has no other material relationship
with the Company. No other individual customer accounted for as much as
8.8% of the Company's product, service, engineering, and licensing revenue
during fiscal 1996. The Company's ten largest customers, including
Siemens, Phillips and 3M/Imation accounted for approximately 57% of
product, service, engineering, and licensing revenue during fiscal 1996.
Backlog
The backlog of orders believed to be firm at July 31, 1996 was
approximately $58.3 million compared with approximately $50.1 million at
July 31, 1995. This increase is principally related to Signal Processing
Technology Products. Many of the orders in the Company's backlog permit
cancellation by the customer under certain circumstances. To date, Analogic
has not experienced material cancellation of orders. The Company
reasonably expects to ship most of its July 31, 1996 backlog during fiscal
1997.
Government Contracts
The amount of the Company's business that may be subject to
renegotiation of profits or termination of contracts or subcontracts at the
election of the Government is insignificant.
Competition
Analogic is subject to competition based upon product design,
performance, pricing, quality and service. Analogic believes that its
innovative engineering and product reliability have been important factors in
its growth. While the Company tries to maintain competitive pricing on
those products which are directly comparable to products manufactured by
others, in many instances Analogic's products will conform to more exacting
specifications and carry a higher price than analogous products manufactured
by others.
8
Analogic's medical X-ray imaging systems are sufficiently specialized so
that Analogic is not aware of products marketed by others which may be
deemed directly competitive. The Company considers its selection by its
OEM customers for design and manufacture of these products and its other
medical products to be much less a function of other competitors in the field
than it is of the "make-or-buy" decision of the individual customers. Many
OEM customers and potential OEM customers of the Company have the
capacity to design and manufacture these products for themselves. In the
Company's area of expertise, the continued signing of new contracts indicates
continued strength in the Company's relationship with its major customers,
although some of these customers continue to commit to shorter term
contracts.
Analogic's competitors include divisions of some larger, more diversified
organizations, as well as several specialized companies. Some of them have
greater resources and larger staffs than Analogic. The Company believes
that, measured by total sales dollars, it is a leading manufacturer of CAT
scanner and MRI electronic sub-systems, industrial digitizing systems for the
weighing industry and high-precision (14 bits or greater) A/D and D/A
converters. Other companies sell substantially more converters than
Analogic, but only a small portion of their products can be used for the
high-precision applications for which Analogic's products are sold.
Research and Product Development
Research and product development is a significant factor in Analogic's
business. The Company maintains a constant and comprehensive research
and development program directed toward the creation of new products as
well as toward the improvement and refinement of its present products and
the expansion of their uses and applications.
Company funds expended for research and product development amounted
to approximately $29,017,000 in fiscal 1996, $29,890,000 in fiscal 1995, and
$26,100,000 in fiscal 1994. Analogic intends to continue its emphasis on
new product development. As of July 31, 1996, Analogic had approximately
330 employees, including electronic development engineers, software
engineers, physicists, mathematicians, and technicians
engaged in research and product development activities. These individuals,
in conjunction with the Company's salespeople, also devote a portion of their
time assisting customers in utilizing the Company's products, developing new
uses for these products, and anticipating customer requirements for new
products.
During fiscal 1996, the Company capitalized $1,985,000 of computer
software testing and coding costs incurred after technological feasibility was
established. These costs will be amortized by the straight line method over
the estimated economic life of the related products, not to exceed three years.
Amortization of capitalized software amounted to $2,325,000 in fiscal 1996.
Environmental Protection
The Company does not anticipate any material effect upon its capital
expenditures, earnings or competitive position resulting from compliance by
it and its subsidiaries with presently enacted or adopted Federal, State and
local provisions regulating the discharge of materials into the environment,
or otherwise relating to the protection of the environment.
9
Employees
As of July 31, 1996, the Company had approximately 1,500 employees.
Financial Information About Foreign and Domestic Operations and Export
Revenue
Product, service, engineering, and licensing export revenue from
companies, primarily in Europe and Asia, amounted to approximately
$77,600,000 (36%) in fiscal 1996 as compared to approximately $65,200,000
(34%) in fiscal 1995, and approximately $60,800,000 (34%) in fiscal 1994.
Management believes that the Company's export revenue is at least as
profitable as its domestic revenue. Most of the Company's foreign revenue
is export revenue denominated in U.S. dollars. Management does not believe
the Company's foreign export revenue is subject to significantly greater risks
than its domestic revenue. See Note 16 of Notes to Consolidated Financial
Statements for further information regarding foreign and domestic operations.
Item 2. Properties
Analogic's principal executive offices and major manufacturing facility are
located in a building, owned by the Company, which it constructed on its site
in Peabody, Massachusetts (a suburb of Boston). This facility consists of
approximately 404,000 square feet of manufacturing, engineering, and office
space. The Company owns approximately 65 acres of land at this location,
which will accommodate future consolidation and expansion as required. The
Company uses approximately 7 1/2 acres of this land for the Peabody
Marriott Hotel which is owned by a wholly-owned subsidiary of the
Company and managed by the Marriott Corporation.
The Company's 68% owned subsidiary, Camtronics, owns a 40,000
square foot manufacturing and office building located in Hartland,
Wisconsin. Camtronics owns approximately eleven acres of land at this
location which should accommodate any future expansion requirements.
The Company leases a modern one-story brick building containing
approximately 41,000 square feet of manufacturing, engineering and office
space located in Wakefield, Massachusetts. This building is leased for a term
expiring on July 31, 2003.
The Company leases two modern adjacent brick and concrete block
buildings in Danvers, Massachusetts. These two buildings total
approximately 170,000 square feet of manufacturing, engineering and office
space and are leased for a term expiring on July 31, 2001. Both of these
buildings have been sublet on a triple net basis on a self renewing lease to
Siemens Medical Electronics, Inc. for a term, which as presently extended
will end on December 1, 1998.
The Company leases approximately 30,200 square feet of manufacturing,
engineering, and office space in Chelmsford, Massachusetts which is
occupied by SKY Computers, Inc. The space is leased for a ten-year term
expiring June 1, 1999.
10
The Company's 100% owned subsidiary, B&K, leases a modern two-story
building containing a total of approximately 41,000 square feet of
manufacturing, engineering, and office space. The building is located in
Gentofte, Denmark (a suburb of Copenhagen). The building is leased for a
term of ten years commencing in January 1993. The lease may be cancelled
by B&K after five years.
On August 25, 1993 the Company purchased a modern two-story building
containing approximately 49,000 square feet of manufacturing and office
space in Peabody, Massachusetts, adjacent to the Company's principal
executive offices. This building is presently leased to an unrelated party for
a term of three years expiring December 15, 1997.
See Item 13 of this Report and Note 7 of Notes to Consolidated Financial
Statements for further information concerning certain of the aforesaid leases.
Analogic and its subsidiaries lease various other facilities used for sales
and service purposes. The Company does not consider any of these leases
to be material.
Analogic owns substantially all of the machinery and equipment used in
its business. Management considers that the Company's plant and
equipment are in good condition and are adequate for its current needs.
Item 3. Legal Proceedings
The Internal Revenue Service has notified the Company that it proposes
to adjust the Company's tax returns for the years 1990 through 1992. (See
Note 11 of Notes to Consolidated Financial Statements.)
There are no other material legal proceedings pending against the
Company or its subsidiaries or of which any of their property is the subject.
Item 4. Submission of Matters to a Vote of Security Holders
NONE
11
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
The Company's Common Stock trades on the NASDAQ Stock Market
under the symbol: ALOG. The following table sets forth the range of high
and low prices for the Common Stock, as reported by NASDAQ during the
quarterly periods indicated:
Fiscal Year High Low
1996 First Quarter $21.00 $18.50
Second Quarter 21.75 16.75
Third Quarter 20.50 17.75
Fourth Quarter 30.25 19.75
1995 First Quarter $19.50 $15.25
Second Quarter 20.00 17.00
Third Quarter 21.00 16.75
Fourth Quarter 19.50 16.00
As of August 30, 1996, there were approximately 950 holders of record
of the Common Stock.
Dividends of $.04 per share were declared for each of the last three
quarters of fiscal 1995 and the first quarter of fiscal 1996. Dividends of $.05
per share were declared for each of the second and third quarters of fiscal
1996. The policy of the Company is to retain sufficient earnings to provide
funds for the operation and expansion of its business.
12
Item 6. Selected Financial Data
(Thousands of dollars, except share data)
Year Ended July 31
1996 1995 1994 1993 1992
Total Revenues $230,460 $208,827 $193,745 $177,876 $149,244
Income from
operations 16,981 15,155 18,205 18,256 8,054
Net Income 13,065 12,706 14,657 12,445 9,910
Earnings per
common and common
equivalent share $1.04 $1.02 $1.18 $1.01 $.78
Dividends paid per
common share $0.18 $0.08 None None None
Number of shares
used in computation
of per share data 12,562 12,475 12,434 12,301 12,715
Working Capital $168,515 $165,799 $150,571 $139,587 $119,029
Total Assets 265,162 260,198 239,620 223,423 196,966
Long-term debt
(including
capitalized
leases) 9,455 10,236 10,993 13,205 16,482
Stockholders'
Equity 211,800 200,893 184,391 168,907 155,859
13
Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
Fiscal 1996 Compared to Fiscal 1995
Product, service, engineering, and licensing revenues for fiscal 1996 were
$213,781,000 as compared to $194,034,000 for fiscal 1995. The increase of
$19,747,000 was principally due to an increased in sales of Medical
Technology Products of $12,141,000, and Signal Processing Technology
Products of $4,464,000 and Industrial Technology Products of $3,142,000.
Other operating revenue of $10,528,000 and $9,720,000 represents revenue
from the Hotel operation for fiscal 1996 and 1995, respectively.
Interest and dividend income increased primarily due to a distribution from
a limited partnership in which the Company has invested. (See Note 5 of
Notes to Consolidated Financial Statements.)
The percentage of total cost of sales to total net sales for fiscal 1996 and
1995 was 62% and 57%, respectively. The increase was primarily due to higher
direct material costs, less favorable product mix, lower selling prices caused
by competitive pressures in certain ultrasound medical technology products,
and additional manufacturing costs associated with the introduction of the
Company's unique, light weight, low-power CT Scanner. Operating costs
associated with the Hotel for fiscal years 1996 and 1995 were $5,627,000
and $5,294,000, respectively.
General and administrative and selling expenses decreased $596,000, a result
of lower selling expenses primarily in the areas of advertising and staff
expenses, offset by higher general and administrative expenses relating to
staffing. Research and product development expenses decreased $873,000
primarily due to a reduction in the engineering effort applicable to the
development of the mobile CT Scanner.
Gain on foreign exchange for fiscal 1996 amounted to $524,000, compared
to a loss of $666,000 for fiscal 1995, primarily from the Company's
subsidiary in Denmark.
Computer software costs of $1,985,000 and $3,524,000 were capitalized in
fiscal 1996 and 1995, respectively. Amortization of capitalized software
amounted to $2,325,000 and $2,355,000 in fiscal 1996 and 1995, respectively.
The amortization of the excess of cost over fair value of net assets acquired
from Camtronics was $127,000 and $138,000 in fiscal 1996 and 1995,
respectively. The amortization of the excess of cost over fair value of net
assets acquired from SKY was $179,000 in fiscal 1996 and 1995.
The amortization of excess of fair value of net assets over cost acquired from
B&K was $542,000 and $533,000 in fiscal 1996 and 1995, respectively.
The Company's share of losses of a newly formed privately held company
amounted to $821,000 in fiscal 1996. (See Note 5 of Notes to Consolidated
Financial Statements.)
14
Fiscal 1996 Compared to Fiscal 1995 (continued)
During July 1995 the Company sold 2,300,000 common shares of Park
Meditech for a net price of $1.00 per share, resulting in a gain of $1,736,000.
(See Note 5 of Notes to Consolidated Financial Statements.)
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, in fiscal 1996 and 1995 amounted to $224,000 and $765,000,
respectively.
Minority interest in the net loss of the Company's consolidated foreign
subsidiary, B&K, in fiscal 1996 and 1995 was $1,370,000 and $247,000,
respectively.
The effective tax rate for fiscal 1996 was 26% vs. 22% for fiscal 1995. This
increase was primarily a result of losses of a foreign subsidiary for which
there was no tax benefit offset in part by the utilization of alternative
minimum tax credits.
Net income for fiscal 1996 was $13,065,000, or $1.04 per share as compared
with $12,706,000, or $1.02 per share for fiscal 1995.
Fiscal 1995 Compared to Fiscal 1994
Product, service, engineering, and licensing revenues for fiscal 1995 were
$194,034,000 as compared to $179,951,000 for fiscal 1994. The increase of
$14,083,000 was principally due to an increase in sales of Medical
Technology Products of $14,292,000 and Signal Processing Technology
Products of $5,888,000 offset by decreased sales of Industrial Technology
Products of $6,097,000. Other operating revenue of $9,720,000 and
$9,166,000 represents revenue from the Hotel operation for fiscal 1995 and
1994, respectively.
The percentage of total cost of sales to total net sales for fiscal 1995 and
1994 was 57% and 55%, respectively. The increase was primarily due to higher
direct material costs, less than favorable product mix, lower selling prices
caused by competitive pressures in certain medical technology products, and
additional manufacturing costs associated with the introduction of new
products. Operating costs associated with the Hotel for fiscal years 1995
and 1994 were $5,294,000 and $5,258,000, respectively.
General and administrative and selling expenses increased $1,484,000
primarily due to increased staffing and related expenses to support new
products. Research and product development expenses increased $3,790,000
primarily due to the Company's efforts in designing and developing newer,
more sophisticated complete systems for the medical and industrial technology
markets along with a large investment in research and development staff and
equipment. The Company anticipates making similar investments over the
next several quarters as new products enter production.
Loss on foreign exchange for fiscal 1995 amounted to $666,000, primarily
from the Company's subsidiary in Denmark.
Computer software costs of $3,524,000 and $3,305,000 were capitalized in
fiscal 1995 and 1994, respectively. Amortization of capitalized software
amounted to $2,355,000 and $1,602,000 in fiscal 1995 and 1994, respectively.
15
Fiscal 1995 Compared to Fiscal 1994 (continued)
Interest expense decreased by approximately $350,000 primarily due to a
reduction in debt and an increase in the amount of interest capitalized.
The amortization of the excess of cost over fair value of net assets acquired
from Camtronics was $138,000 and $208,000 in fiscal 1995 and 1994,
respectively. The amortization of the excess of cost over fair value of net
assets acquired from SKY was $179,000 in fiscal 1995 and 1994.
The amortization of excess of fair value of net assets over cost acquired from
B&K was $533,000 and $577,000 in fiscal 1995 and 1994, respectively.
During July 1995 the Company sold 2,300,000 common shares of Park
Meditech for a net price of $1.00 per share, resulting in a gain of $1,736,000.
During fiscal 1994 the Company's investment in Analogic Scientific was
increased by $2,000,000, reflecting the Company's share of Analogic
Scientific's income. In fiscal 1994 the Company's investment was reduced
by a cash dividend received of $300,000. During 1995 there was no change
in the value of the Company's investment in Analogic Scientific.
Equity in net losses of an unconsolidated affiliate located in Canada,
amounted to $595,000 during fiscal 1994. (See Note 5 of Notes to
Consolidated Financial Statements.)
Minority interest in the net income of the Company's consolidated subsidiary,
Camtronics, in fiscal 1995 and 1994 amounted to $765,000 and $1,157,000,
respectively.
Minority interest in the net losses of a domestic subsidiary in fiscal 1994
amounted to $177,000. The Company ceased operations of this sales and
marketing organization during the third quarter of fiscal 1994.
Minority interest in the net loss of the Company's consolidated foreign
subsidiary, B&K, in fiscal 1995 was $247,000. During fiscal 1994, minority
interest in the net income of B&K was $935,000.
The effective tax rate for fiscal 1995 was 22% vs. 16% for fiscal 1994.
Fiscal 1994 includes a tax loss benefit related to the dissolution of a
foreign subsidiary for which there was no impact on income before income tax.
Net income for fiscal 1995 was $12,706,000, or $1.02 per share as compared
with $14,657,000, or $1.18 per share for fiscal 1994.
Financial Position
The Company's balance sheet at July 31, 1996, reflects a current ratio of 6.0
to 1, compared to 6.4 to 1 at July 31, 1995. Cash, cash equivalents and
marketable securities, along with accounts and notes receivable, constitute
approximately 73% of current assets at July 31, 1996. Liquidity is sustained
principally through funds provided from operations, with short-term time
deposits and marketable securities available to provide additional sources of
cash. The Company places its cash investments in high credit quality
financial instruments and, by policy, limits the amount of credit exposure to
any one financial institution. Management does not anticipate any difficulties
in financing operations at anticipated levels. The Company's debt to equity
ratio was .25 to 1 at July 31, 1996 compared to .30 to 1 at July 31, 1995.
16
Financial Position (continued)
On February 22, 1996, the Company invested $2,000,000 for a 33% interest
in a newly formed privately held company which will design and manufacture
subassemblies for medical imaging equipment.
On July 1, 1996, the Company acquired the remaining 41% minority interest
in B&K for $3,416,000 in cash. The Company now owns 100% of the
outstanding shares of B&K.
Capital expenditures for fiscal 1996 totaled approximately $6,233,000.
As part of a stock repurchase program authorized by the Board of Directors,
the Company made the following purchases of common stock for its treasury:
17,500 shares during fiscal 1996 at an aggregate cost of $345,000; 19,200
shares during fiscal 1995 at an aggregate cost of $326,000 and 97,800 shares
during fiscal 1994 at an aggregate cost of $1,543,000.
Impact of Inflation
Overall, inflation has not had a material impact on the Company's operations
during the past three fiscal years.
Accounting Standards
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting
for Stock-based Compensation" encourages, but does not require, recognition
of compensation expense based on the fair value of employee stock-based
compensation instruments. The Company will not adopt the fair value
method of accounting for employee stock-based compensation but will instead
comply with the pro forma disclosure requirements beginning in fiscal 1997.
The Company believes that adoption of SFAS 123 will not have a material
impact on the Company's financial position or results of operations.
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of," requires that impairment losses be recognized when the
carrying value of an asset exceeds its fair value. The Company regularly
assesses all of its long-lived assets for impairment and, therefore, does not
believe the adoption of the standard in fiscal 1997 will have a material effect
on its financial position or results of operations.
Item 8. Financial Statements and Supplementary Data
The financial statement and supplementary data are listed under PART
IV, Item 14 in this Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
17
PART III
Item 10. Directors and Executive Officers of the Registrant
(a) Directors
Other Offices Held
Director Expiration As of
Name Age Since of Term* August 30, 1996
Bernard M. Gordon 69 1969 1998 Chairman of the
Board and Chief
Executive Officer
Bruce R. Rusch 53 1993 1997 President and Chief
Operating Officer
John A. Tarello 65 1979 1998 Senior Vice
President and
Treasurer
M. Ross Brown 62 1984 1999 Vice President
Edward F. Voboril 53 1990 1999 ----
Gerald L. Wilson 57 1980 1998 ----
Bruce W. Steinhauer 61 1993 1997 ----
*The Board of Directors is divided into three classes, each having a three
year term of office. The term of one class expires each year. Directors hold
office until the Annual Meeting of Stockholders held during the year noted
and until their respective successors have been duly elected and qualified.
18
(b) Executive Officers
Name Age Office Held Has been Held
Bernard M. Gordon 69 Chairman of the Board and 1969
Chief Executive Officer
Bruce R. Rusch 53 President and Chief 1995
Operating Officer
John A. Tarello 65 Senior Vice President 1980 & 1985,
and Treasurer respectively
M. Ross Brown 62 Vice President 1984
Julian Soshnick 64 Vice President 1982
General Counsel,
and Clerk
Each such officer is elected for a term continuing until the first
meeting of the Board of Directors following the annual meeting of
stockholders, and in the case of the President, Treasurer and Clerk, until
their successors are chosen and qualified; provided that the Board may remove
any officer with or without cause.
(c) Identification of certain significant employees:
None
(d) Family relationships:
None
(e) Business Experience:
Bernard M. Gordon has been the Chairman of the Board of Directors
of the Company since 1969 and, was President from 1980 to 1995.
19
Bruce R. Rusch was appointed a Vice President of the Company in
January 1993 and President in January 1995. Mr. Rusch has been President
of SKY Computers, Inc. since 1987. SKY Computers, Inc. was acquired by
Analogic effective April 1, 1992. Mr. Rusch is a director of Astea
International, Inc.
John A. Tarello was the Company's Controller from May 1970
through July 1982, a Vice President of the Company from 1971 to 1980, and
has been Senior Vice President since 1980, and Treasurer since 1985. He is
also a director of Spire Corporation.
M. Ross Brown joined the Company in August 1984 and is responsible
for managing its manufacturing operations. He was elected a Vice President
in October 1984.
Julian Soshnick joined the Company in October 1981 as General
Counsel and has served as a Vice President since July 1982 and Clerk since
1988.
Dr. Gerald L. Wilson is the former Dean of the School of Engineering
at Massachusetts Institute of Technology and the Vannevar Bush Professor of
Engineering at the Massachusetts Institute of Technology. Dr. Wilson has
served on MIT's faculty since 1965 and currently serves as a Professor of
Electrical and Mechanical Engineering. He is a director of Commonwealth
Energy Systems and ASECO Corporation. He also served as Vice President
of Technology and Manufacturing for Carrier Corporation during 1991 and
1992.
Edward F. Voboril has been President and CEO of Wilson Greatbatch
Ltd. of Clarence, New York since December 1990.
Dr. Bruce W. Steinhauer has been Chief Executive Officer of the
Lahey Clinic in Burlington, Massachusetts since early 1992. Prior to that he
was Senior Vice President for Medical Affairs and Chairman of the Board of
Governors for the Medical Group Practice of the Henry Ford Hospital from
1988 to 1992.
(f) Involvement in certain legal proceedings:
None
(g) Promoters and Control Persons
Inapplicable
Compliance with Section 16(a) of the Exchange Act
Upon review of the forms and representations furnished to the
Company pursuant to Item 405 of Regulation S-K, the Company identifies
Edmund F. Becker, Jr. as the only "reporting person" (as defined in said Item
405) who failed to file on a timely basis a report required by Section 16(a)
of the Exchange Act. Dr. Becker failed to timely file one (1) Form 4 on
which one (1) transaction was reported.
20
Item 11. Executive Compensation
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation information for the Chief Executive Officer and each of the next
four most highly compensated executive officers of the Company during the last fiscal year ("Named Officers") for services
rendered in all capacities for the last three fiscal years.
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
Restricted All Other
Name and Total Annual Stock Awards Stock Options Compensation
Principal Position Year Salary Bonuses Compensation ($)(A)(B) ($) (C)
Bernard M. Gordon 1996 $325,000 $25,000 $350,000 --- --- $3,024
Chairman (CEO) 1995 325,000 50,000 375,000 --- --- 3,186
1994 300,000 50,000 350,000 --- --- 4,698
Bruce R. Rusch 1996 $225,000 $21,000 $246,000 --- --- $2,855
President (COO) 1995 206,519 35,000 241,519 --- --- 3,007
1994 159,958 47,000 206,958 --- --- ---
John A. Tarello 1996 $210,000 $21,000 $231,000 --- --- $3,062
Senior Vice President 1995 210,000 35,000 245,000 --- --- 3,225
and Treasurer 1994 195,000 35,000 230,000 --- --- 3,842
M. Ross Brown 1996 $185,000 $18,000 $203,000 --- --- $2,921
Vice President 1995 185,000 30,000 215,000 --- --- 3,076
1994 175,000 30,000 205,000 --- --- 3,316
Julian Soshnick 1996 $185,000 $18,000 $203,000 --- --- $2,949
Vice President and 1995 185,000 30,000 215,000 --- --- 3,106
General Counsel 1994 175,000 30,000 205,000 --- --- 3,345
21
Notes To Summary Compensation Table
___________________________________
(A) Represents stock grants under the Company's Key Employee Stock Bonus
Plan dated March 14, 1983, as amended and restated on January 27, 1988,
pursuant to which Common Stock of the Company may be granted to key employees
to encourage them to exert their best efforts on behalf of the Company. Each
Recipient of the Common Stock pursuant to the Bonus Plan is required to
execute a noncompetition agreement in a form satisfactory to the Company.
The Bonus Plan is administered by a committee appointed by the Board of
Directors consisting of the Chairman of the Board and three other Directors
who are not eligible to participate in the Bonus Plan. Generally, the Common
Stock granted pursuant to the Bonus Plan is not transferable for a period of
three years from the date of the grant and is subject to a risk of forfeiture
in the event that the recipient leaves the employ of the Company during this
period for any reason. Generally, during the subsequent four-year period,
the transfer restrictions will lapse with respect to 25% of the Common Stock
for each year the recipient remains in the employ of the Company. Failure
to remain in the Company's employ during all of the subsequent four-year
period will result in a forfeiture of shares as to which restrictions on
disposition still exist. The Common Stock granted pursuant to the Bonus Plan
is held in escrow by the Company until such restrictions on disposition
lapse. However, while in escrow, the recipient has the right to vote such
shares of Common Stock and to receive any cash dividends thereon. The Board
of Directors, acting upon the recommendation of the Stock Bonus Plan
Committee, may at the time of grant designate a different schedule upon which
the transfer restrictions lapse.
(B) As of July 31, 1996, the following table reflects aggregate stock bonus
awards, granted in 1993, for which transfer restrictions have not yet lapsed:
Shares Market Value
Bruce R. Rusch 33,750 $961,875
M. Ross Brown 22,500 641,250
Julian Soshnick 17,500 498,750
(C) Represents amounts allocated to the Named Officers pursuant to the
Company's profit sharing plan under which it may, but is not required
to, make contributions to a trust for the purpose of providing retirement
benefits to employees.
22
STOCK OPTION GRANTS IN LAST FISCAL YEAR
There were no stock options awarded to named officers under the Company's Key Employee Stock Option
Plans during the last fiscal year.
STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table indicates (i) stock options exercised by the Named Officers during the last
fiscal year; (ii) the number of shares subject to exercisable (vested) and unexercisable (unvested) stock
options as of July 31, 1996; and (iii) the fiscal year-end value of "in-the-money"
unexercised options.
Number of Value of Unexercised
Number of Unexercised Options In-The-Money Options
Shares Acquired Value at Fiscal Year End At Fiscal Year End(A)(B)
On Exercise Realized (A) Exercisable Unexercisable Exercisable Unexercisable
Bernard M. Gordon --- --- --- --- --- ---
Bruce R. Rusch --- --- --- --- --- ---
John A. Tarello --- --- 10,000 --- $136,250 ---
M. Ross Brown --- --- 2,500 7,500 $34,062 $102,188
Julian Soshnick --- --- 2,500 2,500 $34,062 $34,062
___________________________________
(A) The value realized or the unrealized value of in-the-money options at year-end represents the
aggregate difference between the market value on the date of grant and, either the market value on the date
of exercise or, in the case of unrealized value, the market value at July 31, 1996.
(B) "In-the-money" options are options whose exercise price was less than the market price of Common
Shares at July 31, 1996.
23
Compensation of Directors
Commencing August 1, 1996, each director who is not an employee of
the Company is entitled to an annual fee of $10,000 ($8,000 in fiscal 1996)
plus a fee of $1,000 per meeting ($500 in fiscal 1996) for each of the first
four meetings of the Board or any Board Committee attended by him,
together with reimbursement of travel expenses under certain circumstances.
In February 1988, the Board of Directors adopted and stockholders
approved at the January 1989 Annual Meeting of Stockholders, the 1988
Non-Qualified Stock Option Plan for Non-Employee Directors (the "1988
Plan"). Pursuant to the 1988 Plan, options to purchase 50,000 shares of
common stock may be granted only to directors of the Company or any
subsidiary who are not otherwise employees of the Company or any
subsidiary. The exercise price of options granted under the 1988 Plan is the
fair market value of the Common Stock on the date of grant. The 1988 Plan
provides that each Non-Employee director as of the date on which the Board
of Directors adopted the 1988 Plan shall be granted an option to acquire
5,000 shares. Each new Non-Employee director who is subsequently elected to
the Board of Directors shall be granted an option to acquire 5,000 shares
after one year of service. In June, 1996 the Board of Directors amended the
1988 plan to increase the number of options that could be granted to each
Non-Employee director to 10,000 shares.
Options granted under the 1988 Plan are exercisable for a nine-year
period commencing one year after the date of grant. During that exercise
period, subject to the occurrence of certain events, options may be exercised
only to the extent of (a) 33 1/3% of the number of shares covered by the
option one or more years after the date of grant, (b) 66 2/3% of the number
of shares subject to the option two or more years after the date of grant,
and (c) 100% of the number of shares subject to the option three or more
years after the date of grant.
The 1988 Plan is administered by members of the Company's Board of
Directors.
The following table sets forth options granted pursuant to the 1988
plan as of July 31, 1996:
Date of Options Option Options Options Options
Grant Granted Price Exercised Exercisable Unexercisable
Dr. Wilson 2/01/88 5,000 $ 7.125 5,000 --- ---
Dr. Wilson 6/12/96 5,000 $27.750 --- --- 5,000
Mr. Voboril 6/12/91 5,000 $10.875 --- 5,000 ---
Mr. Voboril 6/12/96 5,000 $27.750 --- --- 5,000
Dr. Steinhauer 10/08/93 5,000 $14.750 --- 3,334 1,666
Dr. Steinhauer 6/12/96 5,000 $27.750 --- --- 5,000
24
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) The following table sets forth information as to all persons (including
any "group", as defined in section 13(d)(3) of the Exchange Act) known by the
Company to have owned beneficially 5% or more of its Common Stock, $.05
par value, as of August 30, 1996:
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
Bernard M. Gordon Charitable 4,720,192 shares (1)(2) 37.8% (1)(2)
Remainder Unitrust
Bernard M. Gordon
Julian Soshnick
Gerald P. Bonder, Trustees
8 Centennial Drive
Peabody, MA 01960
Private Capital Management Inc. 1,281,475 shares (3) 10.3% (3)
3003 Ninth Street
Naples, FL 33940
T. Rowe Price 756,000 shares (3) 6.0% (3)
100 East Pratt Street
Baltimore, MD 21202
__________________________________
(1) Exclusive of 6,000 shares owned by Mr. Gordon's wife, as to which he
disclaims any beneficial interest.
(2) Mr. Gordon serves as Trustee of the Bernard Gordon Charitable
Remainder Unitrust (the "Trust") along with Julian Soshnick and Gerald
P. Bonder. The three Trustees, acting by a majority, have full power
to vote or dispose of the shares held by the Trust. Upon the death of
Mr. Gordon, all of the assets of the Trust, in general, will be
distributed to The Gordon Foundation, a Section 501(c)(3) trust formed
by Mr. Gordon with its principal office located at 8 Centennial Drive,
Peabody, Massachusetts.
(3) The Company has been advised informally by Private Capital
Management Inc. and T. Rowe Price that in their capacity as investment
advisors they may be deemed a beneficial owner on August 30, 1996, of
1,281,475 shares, or 10.3% of the Company's Common Stock and
756,000 shares, or 6.0% of the Company's Common Stock, respectively.
25
(b) The following table sets forth information as to ownership of the
Company's Common Stock, $.05 par value, by its directors and by all
directors and executive officers as a group, as of August 30, 1996:
Amount and Nature of Percent
Identity of Person Beneficial Ownership(1) of Class
Bernard M. Gordon 4,720,192 shares (2)(3) 37.8%
Bruce R. Rusch 45,000 shares (4) *
John A. Tarello 42,500 shares (5) *
M. Ross Brown 27,500 shares (4)(5) *
Gerald L. Wilson 2,000 shares *
Edward F. Voboril 5,000 shares (5) *
Bruce W. Steinhauer 3,334 shares (5) *
All Directors and Executive
Officers as a group
(8 persons) 4,874,276 shares (4)(5) 39.0%
*Represents less than 1% ownership
______________________________
(1) The amounts shown are based upon information furnished by the
individual directors and officers. Unless otherwise noted, the
beneficial owners have sole voting and investment power with respect
to the shares listed.
(2) Exclusive of 6,000 shares owned by Mrs. Gordon, in which Mr. Gordon
disclaims all beneficial interest.
(3) Mr. Gordon serves as Trustee of the Bernard Gordon Charitable
Remainder Unitrust (the "Trust") along with Julian Soshnick and Gerald
P. Bonder. The three Trustees, acting by a majority, have full power
to vote or dispose of the shares held by the Trust. Upon the death of
Mr. Gordon, all of the assets of the Trust, in general, will be
distributed to the Gordon Foundation, a Section 501(c)(3) trust formed
by Mr. Gordon with its principal office located at 8 Centennial Drive,
Peabody, Massachusetts.
(4) These amounts include certain shares issued under the Company's Key
Employee Stock Bonus Plan which are subject to forfeiture under certain
circumstances.
(5) These amounts include certain shares deemed beneficially owned under
Exchange Act Rule 13d-3(d)(1).
26
Item 13. Certain Relationships and Related Transactions
Mr. Bernard M. Gordon and Mr. Bernard L. Friedman, the Company's
former Vice Chairman of the Board (Mr. Friedman resigned on July 31,
1993), each own 50% interest in a limited partnership (Audubon Realty),
which owns the Danvers, Massachusetts facilities leased by the Company for
a term to July 31, 2001. These facilities include a 50,000 square foot
building completed in 1978; a 40,000 square foot addition to that building,
completed in 1982; and an 80,000 square foot building which the Company
moved into during 1980. The fixed annual rent on the entire 170,000 square
feet was increased from $1,042,000 to $1,125,000 effective March 1, 1995,
and shall be adjusted as of March 1 every third year to reflect increases in
the cost of living. Both of the facilities are sublet on a self-renewing
lease to Siemens Medical Electronics, Inc. for a term which as presently
extended will end on December 1, 1998, subject to an eighteen-month notice
of cancellation, on a triple-net basis.
Mr. Gordon and Mr. Friedman each own a 50% interest in a limited
partnership which owns the facility located at 360 Audubon Road, Wakefield,
Massachusetts, which is leased by the Company for a term to July 31, 2003.
This facility has been utilized by the Company for manufacturing and office
space since May 1, 1981. The fixed annual rent for this facility was
increased from $315,000 to $333,000 effective May 1, 1996, and shall be
adjusted as of May 1 every third year to reflect increases in the cost of
living.
All of the foregoing rents are on a net lease basis, and accordingly the
Company pays, in addition to the above rental payments, all taxes,
maintenance, insurance, and other costs relating to the leased premises.
See Item 2 of this Report for information as to the character of the
leased premises, and Note 7 of Notes to Consolidated Financial Statements for
further information as to the leases.
Bernard M. Gordon, Chairman of Analogic, personally owns 72% of
the outstanding stock of UltraAnalog, Inc., which he acquired on October 2,
1989. UltraAnalog is a manufacturer of analog-to-digital and
digital-to-analog converters, located in Fremont, California. Analogic has
the irrevocable right to acquire Mr. Gordon's interest at his cost.
(b) Certain Business Relationships:
None
(c) Indebtedness of Management:
None
(d) Transactions with Promoters:
None
27
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Page
Number
a) 1. Financial Statements
Report of independent accountants 29
Consolidated balance sheets at July 31, 1996 and 1995 30 - 31
Consolidated statements of income for the years ended
July 31, 1996, 1995, and 1994 32
Consolidated statements of stockholders' equity for the
years ended July 31, 1996, 1995, and 1994 33 - 35
Consolidated statements of cash flows for the years
ended July 31, 1996, 1995, and 1994 36 - 37
Notes to consolidated financial statements 38 - 51
2. Financial Statement Schedule
II - Valuation and qualifying accounts 52
Other schedules have been omitted because they are not required,
not applicable, or the required information is furnished in the
consolidated statements or notes thereto.
3. Exhibits - See Index to Exhibits 53 - 56
(b) Report on Form 8-K
No reports on Form 8-K were filed by the registrant during
the quarter ended July 31, 1996.
28
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ANALOGIC CORPORATION
By /s/ Bernard M. Gordon
Bernard M. Gordon
Chairman of the Board and
Chief Executive Officer
Date: October 9, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: October 9, 1996 /s/ Bernard M. Gordon
Chairman of the Board,
Chief Executive Officer and
Director
Date: October 9, 1996 /s/ Bruce R. Rusch
President,
Chief Operating Officer and
Director
Date: October 9, 1996 /s/ John A. Tarello
Senior Vice President, Treasurer
and Director
Date: October 9, 1996 /s/ M. Ross Brown
Vice President and Director
Date: October 9, 1996 /s/ Bruce W. Steinhauer
Director
Date: October 9, 1996 /s/ Edward F. Voboril
Director
Date: October 9, 1996 /s/ Gerald L. Wilson
Director
29
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Analogic Corporation
Peabody, Massachusetts
We have audited the accompanying consolidated balance sheets of Analogic
Corporation and subsidiaries as of July 31, 1996 and 1995 and the related
consolidated statements of income, stockholders' equity, and cash flows
and the financial statement schedule listed in Item 14(a) of this Form 10-K
for each of the three years in the period ended July 31, 1996. These
financial statements and financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Analogic
Corporation and subsidiaries as of July 31, 1996 and 1995, and the results
of its operations and its cash flows for each of the three years in the
period ended July 31, 1996 in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects, the
information required to be included therein.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
August 30, 1996
30
Analogic Corporation and Subsidiaries
Consolidated Balance Sheets (000 omitted)
JULY 31,
1996 1995
Assets
Current assets:
Cash and cash equivalents $18,040 $12,404
Marketable securities, at market 82,509 87,398
Accounts and notes receivable,
net of allowance for doubtful accounts
(1996, $1,426 ; 1995, $1,361) 45,207 43,980
Accounts receivable, affiliates 1,608 1,232
Inventories 50,232 46,287
Prepaid expenses and other current assets 4,416 5,108
Total current assets 202,012 196,409
Property, plant and equipment, at cost:
Land and land improvements 4,252 4,252
Buildings 36,825 36,768
Property under capital leases 6,251 6,841
Leasehold and capital lease improvements 2,090 2,158
Manufacturing equipment 63,196 60,850
Furniture and fixtures 19,194 18,642
Motor vehicles 998 1,206
132,806 130,717
Less accumulated depreciation and
amortization 85,050 80,955
47,756 49,762
Investments in and advances to
affiliated companies 8,129 6,574
Excess of cost over acquired net assets,
net of accumulated amortization 375 681
Other assets, including unamortized
software costs (1996, $6,073 ;
1995, $6,413) 6,890 6,772
$265,162 $260,198
The accompanying notes are an integral part of these financial statements
31
Analogic Corporation and Subsidiaries
Consolidated Balance Sheets (000 omitted)
JULY 31,
1996 1995
Liabilities and Stockholders' Equity
Current liabilities:
Mortgage and other notes payable $3,644 $365
Obligations under capital leases 442 393
Accounts payable, trade 11,438 12,467
Accrued employee compensation
and benefits 9,822 9,008
Accrued warranty 2,521 1,516
Accrued expenses 3,632 5,029
Accrued income taxes 1,998 1,832
Total current liabilities 33,497 30,610
Long-term debt:
Mortgage and other notes payable 6,677 7,016
Obligations under capital leases 2,778 3,220
9,455 10,236
Deferred income taxes 4,832 4,683
Minority interest in subsidiaries 4,268 12,489
Excess of acquired net assets over cost, net 1,310 1,287
Commitments
Stockholders' equity:
Common stock, $.05 par; authorized
30,000,000 shares; issued 1996, 13,767,614
shares; issued 1995, 13,691,925 shares 688 685
Capital in excess of par value 21,413 20,517
Retained earnings 202,761 191,938
Unrealized holding gains and losses 2,092 2,004
Cumulative translation adjustments 1,539 2,846
228,493 217,990
Less:
Treasury stock, at cost (1996, 1,273,073
shares; 1995, 1,269,280 shares) 14,550 14,470
Unearned compensation 2,143 2,627
Total stockholders' equity 211,800 200,893
$265,162 $260,198
The accompanying notes are an integral part of these financial statements.
32
Analogic Corporation and Subsidiaries
Consolidated Statements of Income (000 omitted, except share data)
YEARS ENDED JULY 31,
1996 1995 1994
Revenues:
Product and service, net $205,991 $187,964 $177,175
Engineering and licensing 7,790 6,070 2,776
Other operating revenue 10,528 9,720 9,166
Interest and dividend income 6,151 5,073 4,628
Total revenues 230,460 208,827 193,745
Cost of sales and expenses:
Cost of sales:
Product and service 125,726 108,203 95,506
Engineering and licensing 7,379 2,769 2,929
Other operating expenses 5,627 5,294 5,258
General and administrative 18,463 17,188 15,492
Selling 27,195 29,066 29,278
Research and product development 29,017 29,890 26,100
Interest expense 832 812 1,167
(Gain) loss on foreign exchange (524) 666
Amortization of excess of cost
over acquired net assets 306 317 387
Amortization of excess of acquired
net assets over cost (542) (533) (577)
Total cost of sales and expenses 213,479 193,672 175,540
Income from operations 16,981 15,155 18,205
Gain on sale of marketable securit 1,736
Equity in net income (losses)
of unconsolidated affiliates (821) 1,405
Income before income taxes 16,160 16,891 19,610
Provision for income taxes 4,241 3,667 3,038
Minority interest in net income (loss)
of consolidated subsidiaries (1,146) 518 1,915
Net income $13,065 $12,706 $14,657
Earnings per common and common
equivalent share $1.04 $1.02 $1.18
The accompanying notes are an integral part of these financial statements.
33
Analogic Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity - Years Ended July 31, 1996,
1995 and 1994 (000 omitted, except share date)
Common stock Capital in
excess of
Shares Amount par value
Balance, July 31, 1993 13,517,599 $676 $18,807
Shares issued pursuant to
stock grants, net of cancellations 48,750 2 696
Shares issued pursuant to
stock options 35,976 2 290
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 19
Income tax reduction relating
to stock options 99
Translation adjustments for the year
Net income for the year
Balance, July 31, 1994 13,602,325 680 19,911
Shares issued pursuant to
stock grants, net of cancellations 39,500 2 608
Shares issued pursuant to
stock options 50,081 3 429
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 25
Income tax reduction relating
to stock options 126
Translation adjustments for the year
Net income for the year
Dividends paid ($0.08 per share)
Unrealized holding gains and
losses for the period
Other 19 (582)
Balance, July 31, 1995 13,691,925 $685 $20,517
Shares issued pursuant to
stock grants, net of cancellations 20,500 1 275
Shares issued pursuant to
stock options 55,189 2 521
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 31
Income tax reduction relating
to stock options 246
Translation adjustments for the year
Net income for the year
Dividends paid ($0.18 per share)
Unrealized holding gains and
losses for the period
Other (177)
Balance, July 31, 1996 13,767,614 $688 $21,413
The accompanying notes are an integral part of these financial statemen
34
Analogic Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity - Years Ended July 31, 1996,
1995 and 1994 (000 omitted, except share date)
Unrealized Cumulative
Retained holding translation
earnings gains and loss adjustments
Balance, July 31, 1993 $165,565 (614)
Shares issued pursuant to
stock grants, net of cancellations
Shares issued pursuant to
stock options
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan
Income tax reduction relating
to stock options
Translation adjustments for the year 1,172
Net income for the year 14,657
Balance, July 31, 1994 180,222 558
Shares issued pursuant to
stock grants, net of cancellations
Shares issued pursuant to
stock options
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan
Income tax reduction relating
to stock options
Translation adjustments for the year 2,288
Net income for the year 12,707
Dividends paid ($0.08 per share) (991)
Unrealized holding gains and
losses for the period 2,004
Other
Balance, July 31, 1995 $191,938 $2,004 $2,846
Shares issued pursuant to
stock grants, net of cancellations
Shares issued pursuant to
stock options
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan
Income tax reduction relating
to stock options
Translation adjustments for the year (1,307)
Net income for the year 13,065
Dividends paid ($0.18 per share) (2,242)
Unrealized holding gains and
losses for the period 88
Other
Balance, July 31, 1996 $202,761 $2,092 $1,539
The accompanying notes are an integral part of these financial statements
35
Analogic Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity - Years Ended July 31, 1996,
1995 and 1994 (000 omitted, except share date)
Treasury stock Total
Unearned stockholder
Shares Amount compensation equity
Balance, July 31, 1993 (1,157,761) ($12,822) ($2,705) $168,907
Shares issued pursuant to
stock grants, net of cancel (10,000) (698)
Shares issued pursuant to
stock options 5,000 54 346
Purchases of treasury stock (97,800) (1,543) (1,543)
Amortization of
unearned compensation 656 656
Amounts related to employee
stock purchase plan 7,293 78 97
Income tax reduction relating
to stock options 99
Translation adjustments for the year 1,172
Net income for the year 14,657
Balance, July 31, 1994 (1,253,268) (14,233) (2,747) 184,391
Shares issued pursuant to
stock grants, net of cancel (5,000) (610)
Shares issued pursuant to
stock options 432
Purchases of treasury stock (19,200) (326) (326)
Amortization of
unearned compensation 730 730
Amounts related to employee
stock purchase plan 8,188 89 114
Income tax reduction relating
to stock options 126
Translation adjustments for the year 2,288
Net income for the year 12,707
Dividends paid ($0.08 per share) (991)
Unrealized holding gains and
losses for the period 2,004
Other (582)
Balance, July 31, 1995 (1,269,280) ($14,470) ($2,627) $200,893
Shares issued pursuant to
stock grants, net of cancel (9,500) (1) (275)
Shares issued pursuant to
stock options 14,100 147 670
Purchases of treasury stock (17,500) (345) (345)
Amortization of
unearned compensation 759 759
Amounts related to employee
stock purchase plan 9,107 102 133
Income tax reduction relating
to stock options 246
Translation adjustments for the year (1,307)
Net income for the year 13,065
Dividends paid ($0.18 per share) (2,242)
Unrealized holding gains and
losses for the period 88
Other 17 (160)
Balance, July 31, 1996 (1,273,073) ($14,550) ($2,143) $211,800
The accompanying notes are an integral part of these financial statements
36
Analogic Corporation and Subsidiaries
Consolidated Statements of Cash flow (000 omitted)
Years Ended July 31,
1996 1995 1994
Cash flows from operating activities:
Net income $13,065 $12,706 $14,657
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred income taxes 177 255 920
Depreciation 6,203 6,365 6,598
Amortization of capitalized software 2,325 2,355 1,602
Amortization of excess of cost over net
acquired assets 306 317 387
Amortization of excess of acquired net
assets over cost (542) (533) (577)
Amortization of other assets (deferred
charges) (32) 39 3
Minority interest in net income (losses)
of consolidated subsidiaries (1,146) 518 1,915
Provision for losses on accounts
receivable 65 21 (179)
Gain on sale of marketable securities (1,736)
Gain on sale of equipment (40) (34) (30)
Excess of equity in losses (income) of
unconsolidated affiliates over
dividend received 821 (1,105)
Compensation from stock grants 759 731 656
Changes in operating assets & liabilities
Decrease (increase) in assets:
Accounts and notes receivable (1,403) (8,561) (3,543)
Inventories (3,945) (5,118) (1,229)
Prepaid expenses and other
current assets 399 (305) 75
Other assets (426) (17) 74
Increase (decrease) in liabilities:
Accounts payable, trade (1,029) 4,899 (928)
Accrued expenses and other
current liabilities (715) 816 801
Accrued income taxes 412 627 (663)
Total adjustments 2,189 639 4,777
Net cash provided by operating activities 15,254 13,345 19,434
Cash flows from investing activities:
Investments in and advances to affiliated
companies (2,376) (143) (1,583)
Additions to property, plant and equipment (6,233) (8,217) (7,326)
Capitalized software (1,985) (3,524) (3,305)
Proceeds from sale of property, plant and
equipment 119 55 114
Purchases of marketable securities (21,650) (24,062) (12,600)
Maturities of marketable securities 26,627 10,475 9,115
Proceeds from sale of marketable securities 2,300
Net cash used by investing activities (5,498) (23,116) (15,585)
37
Analogic Corporation and Subsidiaries
Consolidated Statements of Cash flow (000 omitted)
Years Ended July 31,
1996 1995 1994
Cash flows from operating activities: (continued)
Cash flows from financing activities:
Proceeds from overdraft facility 3,305
Payments on debt and capital lease obligations (758) (2,331) (631)
Purchase of common stock for treasury (345) (325) (1,543)
Purchase of common stock of majority owned
subsidiary (160) (582) (201)
Issuance of common stock pursuant to stock
options and employee stock purchase plan 803 546 443
Dividends paid shareholders (2,242) (992)
Purchase of minority interest (3,416)
Net cash used by financing activities (2,813) (3,684) (1,932)
Effect of exchange rate changes on cash (1,307) 2,288 1,172
Net increase (decrease) in cash and
cash equivalents 5,636 (11,167) 3,089
Cash and cash equivalents, beginning of year 12,404 23,571 20,482
Cash and cash equivalents, end of year $18,040 $12,404 $23,571
The accompanying notes are an integral part of these financial statements.
38
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of business operations and significant accounting policies:
Business operations:
The Company's operations consist of the design, manufacture and sale
of high-technology, high-precision analog/digital signal processing
instruments and systems to customers in the medical and industrial
industry.
Product, service, engineering and licensing export revenue, primarily
from customers in Europe and Asia, amounted to approximately
$77,600,000 or 36%, $65,200,000 or 34%, and $60,800,000 or 34%
of total product, service, engineering and licensing revenue for the
years ended July 31, 1996, 1995 and 1994, respectively.
Significant accounting policies are as follows:
(a) Principles of consolidation:
The consolidated financial statements include the accounts of the
Company, all wholly-owned and majority-owned subsidiaries.
Investments in companies in which ownership interests range from
20 to 50 percent and the Company exercises significant influence
over operating and financial policies are accounted for using the
equity method. Other investments are accounted for using the cost
method. All significant intercompany accounts and transactions
have been eliminated.
(b) Inventories:
Inventories are stated at the lower of cost or market.
Cost is determined on a first-in, first-out basis.
(c) Property, plant and equipment:
For financial reporting purposes, depreciation and amortization
are provided utilizing the straight-line method over the estimated
useful lives of the assets or lease terms, whichever is shorter, and
are computed principally utilizing accelerated methods for income
tax purposes. Property under capital leases is amortized over the
lease terms.
(d) Revenue recognition:
Revenues are recognized when a product is shipped or a service is
performed.
(e) Capitalized software costs:
The Company capitalizes certain computer software costs which
are amortized utilizing the straight-line method over the economic
lives of the related products not to exceed three years.
Accumulated amortization approximated $10,001,000 and
$7,676,000 at July 31, 1996 and 1995, respectively.
39
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. Summary of business operations and significant accounting policies:
(continued)
(f) Warranty costs:
The Company provides for estimated warranty costs as products
are shipped.
(g) Income taxes:
The Company does not provide for U.S. Federal income taxes on
undistributed earnings of consolidated foreign subsidiaries as
such earnings are intended to be permanently reinvested in those
operations.
(h) Earnings per share:
Earnings per common and common equivalent share is based upon
the weighted average of common and common equivalent shares
outstanding during the year. Primary and fully diluted earnings
per share are the same. The number of common and common
equivalent shares utilized in the per share computations were
12,562,085, 12,475,035 and 12,433,821 in fiscal 1996, 1995 and
1994, respectively.
(i) Cash and cash equivalents:
The Company considers all short-term deposits with a maturity of
three months or less to be cash equivalents. Cash equivalents
amounted to approximately $16,382,000 and $9,004,000 at July 31,
1996 and 1995, respectively.
(j) Concentration of credit risk:
The Company grants credit to domestic and foreign original
equipment manufacturers, distributors and end users. The
Company places its cash investments in high credit quality
financial instruments and, by policy, limits the amount of credit
exposure to any one financial institution.
(k) Marketable securities:
The Company's marketable securities are categorized as available-
for-sale securities, as defined by the Statement of Financial
Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Unrealized holding
gains and losses are reflected as a net amount in a separate
component of stockholders' equity until realized. For the purpose
of computing realized gains and losses cost is identified on a
specific identification basis.
(l) Accounting Standards:
Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-based Compensation" encourages, but does
not require, recognition of compensation expense based on the fair
value of employee stock-based compensation instruments. The
Company will not adopt the fair value method of accounting for
employee stock-based compensation but will instead comply with
the pro forma disclosure requirements beginning in fiscal 1997.
The Company believes that adoption of SFAS 123 will not have
a material impact on the Company's financial position or results
of operations.
40
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. Summary of business operations and significant accounting policies:
(continued)
(l) Accounting Standards: (continued)
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of," requires that impairment
losses be recognized when the carrying value of an asset exceeds
its fair value. The Company regularly assesses all of its
long-lived assets for impairment and, therefore, does not believe
the adoption of the standard in fiscal 1997 will have a material
effect on its financial position or results of operations.
(m) Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions and disclosure of contingencies at
the date of the financial statements. Actual results could differ
from these estimates.
(n) Basis of presentation:
Certain financial statement items have been reclassified to
conform to the current year's format.
2. Business combinations:
The Company's subsidiary, Camtronics, has entered into an agreement
with the three founding stockholders ("Founders") who are also active
employees of Camtronics. The agreement requires Camtronics to
purchase up to 5% of the shares of common stock originally issued to
the Founders at their option during each fiscal year beginning in 1992
pursuant to a predetermined formula. If a Founder does not exercise
his right to cause Camtronics to purchase his outstanding shares, such
rights shall not lapse, but shall be cumulative and may be exercised
thereafter. The Company's ownership of Camtronics increased from
approximately 65% in fiscal 1992 to approximately 68% in fiscal 1996
as a result of the Founders exercising their conversion rights to sell
5% of their shares for the amount of $763,000, $244,000, and $202,000
during fiscal 1996, 1995, and 1994, respectively. The carrying value
of the Company's total investment in Camtronics exceeded its portion
of underlying equity in net assets by approximately $1,453,000. This
excess is being amortized over a 10 year period. Accumulated
amortization amounted to $1,197,000 and $1,071,000 as of July 31,
1996 and 1995, respectively.
As of January 1, 1993, the Company acquired an interest of
approximately 57% in a newly-formed company, B&K Ultrasound
Systems A/S ("B&K"), for $3,607,000 in cash and a subordinated
interest free short-term loan of $3,500,000 which was converted into
equity on July 31, 1993. The Company's ownership interest was
adjusted upward to 59% in fiscal 1994 in accordance with the
shareholders' agreement. B&K, a Danish Corporation, is primarily
engaged in the design and manufacture of ultrasound imaging devices
used in urology and various sonographic techniques. The acquisition
was accounted for as a purchase and B&K's operations have been
included in the Company's consolidated financial statements beginning
January 1, 1993. The Company's equity in net assets of B&K
exceeded the purchase price by approximately $2,662,000. This excess
of acquired net assets over cost is being amortized over a 5 year period
beginning in January, 1993. Accumulated amortization amounted to
$1,908,000 and $1,376,000 as of July 31, 1996 and 1995, respectively.
41
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Business combinations: (continued)
As of July 1, 1996, the Company acquired the remaining 41% interest
in B&K for $3,416,000 in cash. The Company's equity in net assets
of B&K exceeded the purchase price by approximately $565,000. This
excess is being amortized over a five year period beginning July 1,
1996. Amortization during fiscal 1996 was $9,000.
On April 1, 1992, the Company acquired all of the common stock of
SKY Computers, Inc. (SKY) for $3,161,000 in cash. The carrying
value of the Company's investment in SKY exceeded its equity in net
assets by approximately $895,000. This excess is being amortized over
a 5 year period. Accumulated amortization was $776,000 and
$597,000 as of July 31, 1996 and 1995, respectively.
3. Marketable securities:
Marketable securities are categorized as available-for-sale securities
and summarized as follows:
Gross Unrealized
July 31, 1996 Cost Fair Value Gain Loss
Debt securities issued by $78,675,000 $79,651,000 $1,185,000 ($209,000)
various state and local
municipalities and agencies
Equity securities 1,742,000 2,858,000 1,116,000
$80,417,000 $82,509,000 $2,301,000 ($209,000)
July 31, 1995
Debt securities issued by $84,413,000 $85,398,000 $1,277,000 ($292,000)
various state and local
municipalities and agencies
Equity securities 981,000 2,000,000 1,019,000
$85,394,000 $87,398,000 $2,296,000 ($292,000)
Contractual maturities range from one to nine years, with the majority
five years or less.
4. Inventories:
The components of inventory are as follows:
July 31
1996 1995
Raw materials $19,363,000 $18,883,000
Work-in-process 17,830,000 16,037,000
Finished goods 13,039,000 11,367,000
$50,232,000 $46,287,000
42
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Investments in and advances to affiliated companies:
The Company owns 50% of Analogic Scientific, Inc. ("Scientific"), a
joint venture corporation with Kejian Corporation of The People's
Republic of China. The Company's original investment of $1,500,000
has been accounted for using the equity method of accounting. The
Company's share of Scientific's income amounted to $2,000,000 in
fiscal year 1994. The Company did not report any income in fiscal
year 1996 and 1995 related to this investment. Dividends received
from Scientific amounted to $300,000 in fiscal 1994. No dividends
were received in fiscal year 1996 and 1995. During fiscal 1996 the
Company invested an additional $500,000 in Scientific. The carrying
value of this investment was $6,200,000 at July 31, 1996 and
$5,700,000 at July 31, 1995. Transactions with Scientific for fiscal
years 1996, 1995 and 1994 consisted of revenues of approximately
$735,000, $1,076,000 and $2,990,000, respectively. At July 31, 1996
and 1995, accounts receivable from this affiliate were $676,000 and
$1,232,000, respectively.
A charge of $595,000, resulting from the Company's share of losses
in a privately-held company, accounted for by the equity method, had
been recorded in fiscal year 1994. During fiscal year 1994, the
investment in this privately-held company was exchanged for common
stock of Park Meditech, Inc. ("Park").
During June 1995, the Company loaned Park $1,500,000, structured as
a Convertible Subordinated Promissory Note, with interest at 8%,
payable quarterly, and principal due on or before June 1, 1996. This
note was convertible, at the option of the Company, into 600,000
common shares of Park stock until June 1, 1996. In addition, the
Company had warrants convertible to 200,000 common shares of Park
stock at a price of $2.50 (US) until June 1, 1997.
On February 13, 1996, the Company acquired 1,715,384 shares of Park
Common Stock and an 11% Convertible Unsecured Subordinated
Debenture in the principal amount of $750,000 in consideration of the
cancellation of the Convertible Subordinated Promissory Note in the
amount of $1,500,000 and 200,000 Common Share purchase warrants.
With certain restrictions, the Convertible Unsecured Subordinated
Debenture may be converted into Common Shares at a price of $1.20
(Canadian) per Common Share. The Company currently owns
5,715,384 shares or approximately 14% of the outstanding shares of
Park. Park shares are currently traded on the Montreal Exchange
(PKM) as well as the NASDAQ small cap exchange (PMDTF). The
investment in Park is included in marketable securities at July 31, 1996
and 1995, respectively.
On February 22, 1996, the Company invested $2,000,000 for a 33%
interest in a newly formed privately
held company which will design and manufacture subassemblies for
medical imaging equipment. Transactions with this new formed
privately held company consisted of revenues of approximately
$2,667,000 during fiscal 1996. At July 31, 1996, accounts receivable
from this company were $932,000.
The Company's $750,000 investment in a limited partnership is
accounted for using the cost method, as the Company is a limited
partner, and accordingly, has no influence over the partnership.
During fiscal 1996, the Company received a distribution of $623,000
from the limited partnership.
43
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
6. Mortgage and other notes payable:
Mortgage and other notes payable consists of the following:
July 31
1996 1995
3% mortgage note payable, due 2017,
payable quarterly, collateralized
by land, office and manufacturing
facilities $5,516,000 $5,699,000
Business Development Revenue Bonds,
interest of approximately 7% payable
quarterly, annual principal payments
of $150,000 through September 1, 2005,
collateralized by land, office and
manufacturing facilities; is callable
at the Company's option at face value
without penalty from September 1, 1996
through August 31, 1997 1,500,000 1,650,000
Term loan, at prime rate, (8.75% at
July 31, 1995), due April, 1996,
payable in monthly installments,
collateralized by computer equipment
and software 32,000
Uncollateralized foreign bank overdraft
facility with interest at 8.5% per year 3,305,000
10,321,000 7,381,000
Less current portion 3,644,000 365,000
$ 6,677,000 $7,016,000
Principal maturities in each of the next five fiscal years on the above
notes are as follows: 1997, $3,644,000; 1998, $344,000; 1999, $350,000;
2000, $356,000; 2001, $363,000.
44
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Lease commitments and related party transactions:
The Company leases three operating facilities from a partnership in
which the Chairman and the former Vice Chairman are partners under
leases that have been accounted for as capital leases. Certain leases
contain contingent rentals based upon cost of living adjustments.
Contingent rentals were not significant in 1996, 1995 and 1994.
One of the Company's wholly-owned subsidiaries leased certain
machinery and equipment under capital lease agreements which expired
in 1996.
Property under capital leases is included in property, plant and
equipment, as follows:
July 31
1996 1995
Land and buildings $ 6,251,000 $ 6,251,000
Machinery and equipment 590,000
6,251,000 6,841,000
Less accumulated amortization 4,781,000 5,017,000
Net capital lease assets $ 1,470,000 $ 1,824,000
Certain of the Company's subsidiaries lease manufacturing and office
space under non-cancelable operating leases. These leases expire
through 1999 and contain renewal options. The Company leases
certain other real property and equipment under operating leases which,
in the aggregate, are not significant.
Rent expense approximated $534,000, $610,000 and $814,000 (net of
sublease income of $1,186,000, $1,179,000 and $1,199,000) in fiscal
1996, 1995 and 1994, respectively.
The following is a schedule by year of future minimum lease payments
at July 31, 1996:
Capital Operating
Fiscal Year Leases Leases
1997 $812,000 $850,000
1998 812,000 857,000
1999 812,000 470,000
2000 812,000 40,000
2001 812,000
Last years (through 2003) 578,000
$4,638,000 $2,217,000
Less amount representing
interest, at 9.5% - 17.6% 1,418,000
Present value of minimum
lease payments (includes
current portion of $442,000) $3,220,000
45
ANALOGIC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Lease commitments and related party transactions: (continued)
Future minimum lease payments under capital leases have not been
reduced for sublease rental income of approximately $1,186,000.
Included in accounts and notes receivable are $200,000 of convertible
debentures from UltraAnalog, Inc., a manufacturer of analog-to-digital
and digital-to-analog converters. Bernard M. Gordon, the Company's
Chairman, owns 72% of the outstanding common stock of
UltraAnalog, Inc. which the Company, solely at its option, has the
right to acquire at his cost.
8. Stock option and stock bonus plans:
At July 31, 1996, the Company had three key employee stock option
plans; two of which have lapsed as to the granting of options. In
addition, the Company has one key employee stock bonus plan, one
non-employee director stock option plan and one employee stock
purchase plan.
Options granted under four stock option plans become exercisable in
installments commencing no earlier than one year from the date of
grant and no later than five years from the date of grant. Options
issued under the plans are non-qualified options or incentive stock
options and are issued at prices of not less than 100% of the fair
market value at the date of grant. Tax benefits from early disposition
of the stock by optionees under incentive stock options, and from
exercise of non-qualified options are credited to capital in excess of par
value.
Under the Company's key employee stock bonus plan, common stock
may be granted to key employees under terms and conditions as
determined by the Board of Directors. Generally, participants under
the stock bonus plan may not dispose or otherwise transfer stock
granted for three years from date of grant. Upon issuance of stock
under the plan, unearned compensation equivalent to the market value
at the date of grant is charged to stockholders' equity and subsequently
amortized over the periods during which the restrictions lapse (up to
six years). Amortization of $759,000, $730,000 and $656,000 was
recorded in fiscal 1996, 1995 and 1994, respectively.
Under the employee stock purchase plan, participants are granted
options to purchase the Company's common stock twice a year at the
lower of 85% of market value at the beginning or end of each period.
Calculation of the number of options granted, and subsequent purchase
of these shares, is based upon voluntary payroll deductions during each
six month period. The number of options granted to each employee
under this plan, when combined with options issued under other plans,
is limited to a maximum outstanding fair market value of $25,000
during each calendar year. The number of shares issued pursuant to
this plan totaled 9,107 in 1996, 8,188 in 1995 and 7,293 in 1994.
At July 31, 1996, 959,105 shares were reserved for grant under the
above stock option, bonus and purchase plans.
46
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
8. Stock option and stock bonus plans: (continued)
The following table sets forth the stock option transactions
for the years ended July 31, 1996, 1995 and 1994:
1996 1995 1994
Option Number Option Number Option Number
price per of price per of price per of
share shares share shares share shares
Options
outstanding,
beginning
of year $7.125-$18.25 446,502 $7.125-$18.00 359,729 $7.125-$16.125 325,955
Options
granted 18.00-27.75 151,000 16.50-18.25 164,850 14.750-18.00 109,125
Options
exercised 7.125-16.50 (69,289) 7.125-11.75 (50,081) 7.125-14.00 (40,976)
Options
cancelled (38,425) (27,996) (34,375)
Options
outstanding,
end of year 8.25-27.75 489,788 7.125-18.25 446,502 7.125-18.00 359,729
Options
exercisable,
end of year 8.25-27.75 94,964 7.125-16.50 140,406 7.125-11.75 113,791
9. Profit sharing retirement plan:
The Company has a qualified Profit Sharing Retirement Plan for the
benefit of eligible employees. The plan provides that the Company shall
make contributions from current or accumulated earnings as determined by
the Board of Directors. The contribution each year shall in no event
exceed the maximum allowable under applicable provisions of the Internal
Revenue Code. Profit sharing expense amounted to $700,000 in 1996,
$700,000 in 1995 and $660,000 in 1994.
The Company has 401(K) plans under which employees can contribute up
to 15% of their annual base income, not to exceed the maximum amount
allowable under the Internal Revenue Code in any one calendar year.
47
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. Interest:
Total interest incurred amounted to $1,002,000, $988,000, and
$1,261,000 in 1996, 1995 and 1994, respectively, of which $170,000 in
1996, $176,000 in 1995 and $94,000 in 1994 was capitalized.
11. Income taxes:
The components of the provision for income taxes are as follows:
July 31
1996 1995 1994
Current income taxes:
Federal $ 3,757,000 $2,795,000 $1,747,000
State and Foreign 307,000 617,000 371,000
4,064,000 3,412,000 2,118,000
Deferred income taxes (benefit):
Federal 187,000 291,000 915,000
State and foreign ( 10,000) (36,000) 5,000
177,000 255,000 920,000
$4,241,000 $3,667,000 $ 3,038,000
The tax effects of the principal temporary differences resulting in
deferred tax expense (benefit) are as follows:
July 31
1996 1995 1994
Unrealized equity
gain/loss ( $369,000) $493,000 $424,000
Capitalized software 26,000 151,000 325,000
Depreciation 598,000 306,000 370,000
Bad debts ( 59,000) 17,000 6,000
Inventory valuation ( 78,000) ( 42,000) ( 11,000)
Benefit Plans ( 175,000) ( 486,000) ( 18,000)
Other items, net 234,000 ( 184,000) ( 176,000)
$ 177,000 $ 255,000 $ 920,000
Income (loss) before income taxes from domestic and foreign
operations is as follows:
July 31
1996 1995 1994
Domestic $19,796,000 $17,942,000 $17,356,000
Foreign (3,636,000) (1,051,000) 2,254,000
$16,160,000 $16,891,000 $19,610,000
48
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. Income taxes: (continued)
The components of the deferred tax assets and liabilities are as
follows:
Deferred Tax Deferred Tax
Assets Liabilities
July 31, 1996
Depreciation $ 3,212,000
Bad debt allowance $ 204,000
Capitalized interest and other costs 156,000 473,000
Inventory 1,613,000
Warranty 659,000
Benefit plans 1,340,000
Lease transactions 710,000
Unrealized equity gain/loss 828,000 1,689,000
Capitalized software 1,878,000
Net operating loss carryforwards 2,630,000
Alternative minimum tax credit
carryforwards 511,000
Miscellaneous 401,000
9,052,000 7,252,000
Valuation allowance (4,231,000)
$ 4,821,000 $7,252,000
July 31, 1995
Depreciation $2,614,000
Bad debt allowance 145,000
Capitalized interest and other costs 305,000 452,000
Inventory 445,000
Warranty 589,000
Benefit plans 1,165,000
Lease transactions 720,000
Unrealized equity gain/loss 400,000 1,630,000
Capitalized software 1,852,000
Business credit carry forwards 742,000
Alternative minimum tax credit
carryforwards 997,000
Miscellaneous 277,000
5,785,000 6,548,000
Valuation allowance ( 1,491,000)
$ 4,294,000 $6,548,000
Included in prepaid expenses and other current assets is $2,401,000 and
$2,429,000 of current deferred tax assets at July 31, 1996 and 1995,
respectively.
49
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
11. Income taxes: (continued)
A reconciliation of income taxes at the United States statutory rate
to
the effective tax rate follows:
Year Ended July 31,
1996 1995 1994
U.S. federal statutory tax rate 35% 35% 35%
Tax loss on dissolution of foreign
subsidiary ( 9 )
Foreign sales corporation tax
benefit ( 3 ) ( 3 ) ( 2 )
State income taxes, net of
federal tax benefit 2 1 1
Tax exempt interest ( 8 ) ( 8 ) ( 6 )
Net losses (profits) of
subsidiaries and affiliates
not taxed 7 ( 1 )
General business credit utilized ( 3 ) ( 1 )
Alternative minimum tax ( 3 ) 3
Other items, net ( 1 ) ( 2 ) ( 5 )
Effective tax rate 26% 22% 16%
The Internal Revenue Service has examined the Company's federal
consolidated income tax returns through fiscal 1992. Following a routine
audit, the Company has been notified by the Internal Revenue Service that
it proposes to adjust the Company's tax returns for the years 1990 through
1992 by increasing its tax liability for those years by $2,837,473,
$2,151,574 and $1,762,849, respectively. The major claims relate to an
alleged forgiveness of debt arising from the acquisition of property from
a subsidiary of the FDIC and an alleged excess accumulation of earnings.
The transaction concerning the forgiveness of debt was conducted in
accordance with guidelines established by the Company's independent
auditors, which they advised were in compliance with IRS Regulations.
Accordingly, the Company believes that the claim is without merit.
Similarly, the Company's counsel believes that the claims concerning
excess accumulation of earnings are without foundation and are erroneously
based upon a lack of understanding of the nature of the Company's
business. The Company has filed a protest to the IRS which vigorously
contests these ill founded claims and believes that it will prevail.
Two of the Company's subsidiaries have elected to be taxed as Foreign
Sales Corporations (FSC).
The Company has alternative minimum tax credit carryforwards of
approximately $511,000 which may be carried forward indefinitely.
One of the Company's subsidiaries has a net operating
loss carryforward of approximately $1,600,000 expiring in 2009. In
addition, certain of the Company's foreign subsidiaries have net operating
loss carryforwards of approximately $4,500,000 which may be carried
forward indefinitely.
50
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
12. Quarterly results of operations (unaudited):
The following is a summary of unaudited quarterly results of
operations for the years ended July 31, 1996 and 1995.
Total Net Earnings
revenues income per share
1996
quarters
First $ 46,478,000 $ 1,359,000 $ .11
Second 53,146,000 2,000,000 .16
Third 60,486,000 3,762,000 .30
Fourth 70,350,000 5,944,000 .47
Total $230,460,000 $ 13,065,000 $ 1.04
1995
quarters
First $ 50,931,000 $ 3,474,000 $ .28
Second 52,537,000 3,132,000 .25
Third 49,104,000 1,866,000 .15
Fourth 56,255,000 4,234,000 .34
Total $208,827,000 $ 12,706,000 $1.02
13. Transactions with major customers and industries:
One export customer accounted for approximately $30,000,000 or 14%,
$27,700,000 or 14% and $25,700,000 or 14% of total product, service,
engineering and licensing revenue in 1996, 1995 and 1994, respectively.
Of the total product, service, engineering and licensing revenue, one
domestic customer accounted for approximately $18,800,000 or 9%,
$20,100,000 or 10% and $23,700,000 or 13% in 1996, 1995 and 1994,
respectively.
The Company's ten largest customers accounted for approximately 57%
of product, service, engineering, and licensing revenue during fiscal
1996.
Medical Technology Products, consisting primarily of electronic
subsystems for medical imaging equipment, accounted for approximately 71%
of product, service, engineering, and licensing revenue in fiscal 1996.
51
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. Supplemental disclosure of cash flow information:
During fiscal years 1996, 1995 and 1994, interest paid amounted to
$970,000, $1,371,000 and $1,039,000, respectively.
Income taxes paid during fiscal years 1996, 1995 and 1994 amounted
to $3,040,000, $2,802,000 and $3,763,000, respectively.
15. Fair value of financial instruments:
The carrying amounts of cash, cash equivalents, receivables,
mortgages and other notes payable approximate fair value. The
Company believes similar terms for mortgage and other notes payable
would be attainable. The fair value of marketable securities are
estimated based on quoted market prices for these securities.
16. Foreign Operations
Financial information relating to the Company's foreign and domestic
operations for fiscal years 1996, 1995, and 1994 are as follows:
FY 1996 Foreign Domestic Total
Revenue $26,377,000 $204,083,000 $230,460,000
Income (loss) from operations (3,791,000) 20,772,000 16,981,000
Identifiable assets 23,891,000 241,271,000 265,162,000
FY 1995
Revenue $31,522,000 $177,305,000 $208,827,000
Income (loss) from operations (1,051,000) 16,206,000 15,155,000
Identifiable assets 29,313,000 230,885,000 260,198,000
FY 1994
Revenue $42,231,000 $151,514,000 $193,745,000
Income from operations 2,254,000 15,951,000 18,205,000
Identifiable assets 32,917,000 206,703,000 239,620,000
52
ANALOGIC CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E Column F
Additions
charged to Additions
Balance at profit and charged Deductions Balance
beginning loss or to other from at end
Description of period income accounts reserves Recoveries of period
Year ended July 31, 1996:
Allowance for doubtful accounts $1,361,000 $185,000 ($120,000) $1,426,000
Deferred tax valuation allowance 1,491,000 3,720,000 (980,000) 4,231,000
Year ended July 31, 1995:
Allowance for doubtful accounts $1,339,000 $188,000 ($166,000) $1,361,000
Deferred tax valuation allowance 1,384,000 107,000 1,491,000
Year ended July 31, 1994:
Allowance for doubtful accounts $1,518,000 $65,000 ($244,000) $1,339,000
Deferred tax valuation allowance 1,350,000 34,000 1,384,000
53
INDEX TO EXHIBITS
TITLE INCORPORATED BY REFERENCE TO
3.1 Restated Articles of Exhibit 3.1 to the Company's
Organization, as Amended Annual Report on Form 10-K for
March 15, 1988 the fiscal year ended July 31,
1988
3.2 By-laws, as amended January Exhibit 3.2 to the Company's
27, 1988 Annual Report on Form 10-K for
the fiscal year ended July 31,
1988
10.1 Lease dated March 5, 1976 Exhibit 6(e) to the Company's
from Bernard M. Gordon to Registration Statement on Form
Analogic S-14 (File No. 2-61959)
10.2 Amendment of Lease dated Exhibit to the Company's Report
May 1, 1977 between Bernard on Form 8-K dated May 1, 1977
M. Gordon and Analogic
10.3 Lease dated January 16, 1976 Exhibit to the Company's Annual
from Bernard M. Gordon on Data Report on Form 10-K for the fiscal
Precision Corporation and year ended July 31, 1977
related Assignment of Lease
dated October 31, 1979 from
Data Precision Corporation
to Analogic
10.4(a)Lease dated October 31, 1977 Exhibit 6(d) to the Company's
from Audubon Realty, Ltd. Registration Statement on Form
to Data Precision Corporation S-14 (File No. 2-61959)
and related letter agreement
dated January 18, 1978
(b)Amendment of Lease dated Exhibit I to the Company's Annual
June 19, 1979 between Audubon Report on Form 10-K for the fiscal
Realty, Ltd. and Analogic year ended July 31, 1982
(c)Third Amendment of Lease Exhibit to the Company's Annual
dated August 2, 1982 Report on Form 10-K for the fiscal
year ended July 31, 1982
(d) Fourth Amendment of Lease Exhibit 19.1 to Quarterly Report on
dated December 31, 1982 Form 10-Q for the three months
ended January 31, 1983
10.5(a)Lease dated March 16, 1981 Exhibit II to the Company's
from Audubon Realty Ltd. to Quarterly Report on Form 10-Q
Analogic for the three months ended
April 30, 1981
(b) Amendment of Lease dated Exhibit to the Company's Annual
October 31, 1984 Report on form 10-K for the fiscal
year ended July 31, 1985
10.6 Land Disposition Agreement Exhibit to the Company's Annual
by and between City of Report on Form 10-K for the fiscal
Peabody Community Development year ended July 31, 1981
Authority and Analogic
Corporation
10.7 Loan Agreement among the City Exhibit to the Company's Annual
of Peabody, its Community Report on Form 10-k for the fiscal
Development Authority, and year ended July 31, 1981
Analogic Corporation
54
10.8 Amendments to Urban Development Exhibit 10.13 to the Company's
Action Grant Agreement dated Annual Report on Form 10-K for the
August 28, 1986 and September fiscal year ended July 31, 1986
30, 1986
10.9 Promissory Note of Analogic Exhibit to the Company's Annual
payable to Peabody Community Report on Form 10-K for the fiscal
Development Authority year ended July 31, 1981
10.10(a)Stockholder Agreement as of Exhibits to the Company's Report on
July 9, 1986 by and among Form 8-K dated July 31, 1986
Siemens AG, SCC, and Analogic
including the following
exhibits thereto
(b) Development Agreement dated as
of July 28, 1986 between "
Siemens AG and Medical
Electronics Laboratories, Inc.
(c) Manufacturing Agreement dated
as of July 28, 1986 between "
Analogic and Medical
Electronics Laboratories, Inc.
(d) License Agreement dated as of
July 28, 1986 between Analogic "
and Medical Electronics
Laboratories, Inc.
(e) License Agreement I dated as Exhibits to the Company's Report
of July 28, 1986 between on Form 8-K dated July 31, 1986
Siemens AG and Medical
Electronics Laboratories, Inc.
(f) License Agreement II dated as
of July 28, 1986 between "
Siemens AG and Medical
Electronics Laboratories, Inc.
(g) Sublease dated as of July 28,
1986 between Analogic as
sublessor and Medical "
Electronics Laboratories, Inc.
as sublessee
10.11 Stock Purchase Agreement as Exhibit 10.11 to the Company's
of March 11, 1988 by and Annual Report on Form 10-K for
among Siemens AG, SCC, SMS, fiscal year ended July 31, 1988
MEL, and Analogic
10.12(a)Anamass Partnership Agree- Exhibit 10.12(a) to the Company's
ment dated as of July 5, Annual Report on Form 10-K for
1988 between Ana/dventure fiscal year ended July 31, 1988
Corporation and Massapea,
Inc.
(b) Ground Lease Agreement dated Exhibit 10.12(b) to the Company's
July 5, 1988 between Analogic Annual Report on Form 10-K for
and Anamass Partnership fiscal year ended July 31, 1988
(c) Equity Infusion Agreement Exhibit 10.12(c) to the Quarterly
Report on Form 10-Q for the three
months ended January 31, 1991
(d) Resolution Agreement dated Exhibit 10.12(d) to the Company's
July 31, 1991 and ratified Annual Report on Form 10-K for the
on August 8, 1991 fiscal year ended July 31, 1987
55
10.13 Key Employee Stock Option Exhibit 10.7 to the Company's
Plan dated April 21, 1978 Annual Report on Form 10-K for the
as amended and restated fiscal year ended July 31, 1987
December 4, 1981 and further
amended on October 9, 1984
and January 28, 1987
10.14 Key Employee Stock Option Exhibit 10.8 to the Company's
Plan dated August 8, 1980 Annual Report on Form 10-K for the
as amended and restated fiscal year ended July 31, 1987
December 4, 1981 and further
amended on October 9, 1984
and January 28, 1987
10.15(a)Analogic Corporation Profit Exhibit 6(c) to the Company's
Sharing Plan dated July 26, Registration Statement on Form
1977 S-14 (File No. 2-61959)
(b) Amendments 2,3,4 and 5 to Exhibit 10.10(b) to the Company's
said Profit Sharing Plan Annual Report on Form 10-K for the
fiscal year ended July 31, 1980
(c) Restated Analogic Corporation Exhibit 10.9(c) to the Company's
Profit Sharing Plan dated Annual Report on Form 10-k for the
July 31, 1985 and Amendment fiscal year ended July 31, 1985
No. 1 thereto dated August 20,
1985
10.16 Key Employee Stock Bonus Plan Exhibit A to definitive proxy
dated March 14, 1983 as statement for the Company's
amended on January 27, 1988 Special Meeting in lieu of
Annual Meeting of Stockholders
held January 25, 1984
10.17 Key Employee Incentive Stock Exhibit 10.15 to the Company's
Option Plan dated March 14, Annual Report on Form 10-K for
1983, as amended and the fiscal year ended July 31,
restated on January 28, 1987 1987
10.18 1985 Non-Qualified Stock Exhibit 10.19 to the Company's
Option Plan dated May 13, Annual Report on Form 10-K for the
1985 fiscal year ended July 31, 1985
10.19 Employee Qualified Stock Exhibit G to Company's definitive
Purchase Plan dated proxy statement dated December 9,
January 22, 1986 1985 for the Company's Special
Meeting in lieu of Annual Meeting
of Stockholders held January 22,
1986
10.20 Proposed 1988 Non-Qualified Exhibit 10.20 to the Company's
Stock Option Plan for Non- Annual Report on Form 10-K for the
Employee Directors fiscal year ended July 31, 1988
10.21 Form of Indemnification Exhibit 10.19 to the Company's
contract Annual Report on Form 10-K for
the fiscal year ended July 31, 1987
10.22 Agreement and Plan Merger Exhibit 10.22 to the Company's
Between SKY COMPUTERS, Inc. Annual Report on Form 10-K for the
and Analogic Corporation fiscal year ended July 31, 1992
56
10.23(a)Agreement between B&K Medical Exhibits to the Company's Report
Holding A/S and Analogic on Form 8-K dated December 18, 1992
Corporation dated October 20,
1992
(b) Addendum dated December 11,
1992 to Agreement between B&K "
Medical Holding A/S and
Analogic Corporation dated
October 20, 1992
(c) Shareholders Agreement between
B&K Medical Holding A/S and "
Analogic Corporation dated
December 11, 1992
10.24 Key Employee Incentive Stock Exhibit A to the Company's
Option Plan dated June 11, definitive Proxy Statement
1993 dated December 1, 1993 for
the Company's Annual Meeting
of Stockholders held January 21,
1994
57
EXHIBITS
TITLE
21. List of Subsidiaries
23. Consent of Coopers & Lybrand, L.L.P.
27. Financial Data Schedule
58
EXHIBIT 21
JURISDICTION OF
NAME INCORPORATION
Analogic Limited Massachusetts
Analogic Foreign Sales Corporation Virgin Islands
Analogic Securities Corporation Massachusetts
Anadventure II Corporation Massachusetts
Anadventure Delaware Corporation Delaware
Ana/dventure Corporation Massachusetts
B&K Ultrasound Systems A/S Denmark
Camtronics Foreign Sales Corporation Virgin Islands
Camtronics, Ltd. Wisconsin
SKY COMPUTERS, Incorporated Massachusetts
SKY Limited England
59
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Analogic Corporation on Form S-3 (File Nos. 2-96488, 33-1089 and 33-1463)
and Form S-8 (File Nos. 2-95091, 33-5913, 33-6835, 33-53381 and 33-27372) of
our report dated August 30, 1996 on our audits of the consolidated financial
statements and financial statement schedule of Analogic Corporation at July
31, 1996 and 1995, and for the years ended July 31, 1996, 1995, and 1994,
which report is included in the Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
October 7, 1996