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, 1995 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. [ X ]
The aggregate market value of the Registrant's Common Stock held by
non-affiliates of the Registrant at August 31, 1995 was approximately
$143,410,309.
Number of shares of Common Stock outstanding at August 31, 1995:
12,424,270
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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PART I
Item 1. Business
(a) Developments During Fiscal 1995
Total revenues of Analogic Corporation (hereinafter, together with
its subsidiaries, referred to as "Analogic" or the "Company") for the
fiscal year ended July 31, 1995, were $208,827,000 as compared to
$193,745,000 for fiscal year 1994, an increase of 8%. Net income was
$12,706,000, or $1.02 per share as compared to $14,657,000, or $1.18 per
share for fiscal year 1994.
During January, 1994, the Company transferred its 44% interest in a
privately-held company to Park Meditech, Inc. ("Park"), located in
Toronto, Canada in exchange for 6,000,000 shares of Park common stock plus
1,000,000 common stock warrants. Each warrant is exercisable at the price
of $5.00 (Canadian) into one share of Park common stock, and may be
exercised through April 1996. During April, 1994, the Company purchased
300,000 units of Park for $824,000. Each unit consists of one common
share of Park stock and one-half of a Share Warrant. Each Share Warrant
is convertible to one common share of Park for a price of $4.00 (Canadian)
on or before December 15, 1995.
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 is
convertible, at the option of the Company, into 600,000 common shares of
Park stock until June 1, 1996. In addition, the Company has warrants
convertible to 200,000 common shares of Park stock at a price of $2.50
(US) until June 1, 1997.
During July, 1995 the Company sold 2,300,000 common shares of Park
common stock for a net price of $1.00 per share. The Company currently
owns 4,000,000 shares or approximately 15% of the outstanding shares of
Park.
(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-precision 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.
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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 1995 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 very precise, rather
than lower-cost, medium or low-precision, 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 languages supported by
third-party software houses and proprietary set-up and diagnostic
software.
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The company recently introduced 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.
Analogic manufactures 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 ten or
more million operations per second, is less than that of general purpose
computers. Analogic believes its array processors have been cost
effective when compared with competitive array processors.
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 (D.S.P.) floating
point products which are used in the above mentioned markets. The SKY
Computers, Inc. acquisition added a line of desktop processors for
workstations that provide super computing performance for
computation-intensive applications.
The Company also manufactures 8-bit grey scale and color video
frame grabbers for real-time digital image acquisition and display. These
products have a wide range of military and commercial applications.
Medical Technology Products, consisting primarily of medical
imaging equipment accounted for approximately 72% of product, service,
engineering, and licensing revenue in fiscal 1995.
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 conversion equipment and
complete data acquisition systems. Recently the Company has completed the
design of a complete low cost CAT scanner, incorporating proprietary
technology. These scanners will be sold on an OEM basis to medical
equipment companies.
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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 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 M.R.I.
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
intrapartum and antepartum applications have the capability to measure,
compute, display and print fetal and maternal heart rates, maternal
contraction frequency and relative severity and other maternal vital sign
parameters to insure both maternal and fetal well being.
The products manufactured by Camtronics, our 68% owned
subsidiary, are included herein as medical technology products. It
designs and manufactures state-of-the-art imaging processing products for
diagnostic and interventional applications in cardiac catheterization
laboratories and for other radiology procedures. They also manufacture
optical multiformat cameras used primarily in medical ultrasound and
nuclear medicine applications.
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 8% of fiscal 1995 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,
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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.
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.
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
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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.
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 3 of notes to consolidated financial statements.)
Material Customers
The Company's three largest customers for the fiscal year ended
July 31, 1995 were Siemens, a major German manufacturer of electronic and
electrical equipment; General Electric Corporation, and 3M Corporation,
which accounted for approximately 14%, 11%, and 10%, respectively, of
product, service, engineering, and licensing revenue. Loss of any one of
these customers would have a material adverse effect upon the Company's
business. Neither Siemens, General Electric Corporation, nor 3M
Corporation has any material relationships with the Company except as
significant and valued customers. No other individual customer accounted
for as much as 6% of the Company's product, service, engineering, and
licensing revenue during fiscal 1995. The Company's ten largest
customers, including Siemens, General Electric Corporation, and 3M
Corporation, accounted for approximately 56% of product, service,
engineering, and licensing revenue during fiscal 1995.
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Backlog
The backlog of orders believed to be firm at July 31, 1995 was
approximately $50.1 million compared with approximately $46.5 million at
July 31, 1994. This increase is principally related to medical 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, 1995 backlog during fiscal 1996.
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.
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, waveform analyzers 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.
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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 $29,890,000 in fiscal 1995, $26,100,000 in
fiscal 1994, and $25,634,000 in fiscal 1993. Analogic intends to continue
its emphasis on new product development. As of July 31, 1995, Analogic
had approximately 341 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 1995, the Company capitalized $3,524,000 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 $2,355,000 in fiscal 1995.
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. (See Item 3 of this Report, Legal Proceedings, Page 11.)
Employees
As of July 31, 1995, the Company had approximately 1,414
employees.
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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
$65,200,000 (34%) in fiscal 1995 as compared to approximately $60,800,000
(34%) in fiscal 1994, and approximately $66,900,000 (41%) in fiscal 1993.
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 15 of notes to
consolidated financial statements for further information regarding
foreign and domestic operations.
Item 2. Properties
Analogic's principal executive offices and a 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 Hotel
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
a total of 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, 1997.
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
seven-year term expiring June 1, 1996.
The Company's 59% owned subsidiary, B&K Medical A/S, leases a
modern two-story building containing a total of approximately 41,000
square feet of manufacturing, engineering, and office space. The building
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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 two years expiring December 15, 1996.
See Item 13 of this Report and Note 6 of notes to consolidated
financial statements for further information concerning certain of the
afore-said 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
On or about February 26, 1990, the Company was impleaded as a
third-party defendant in United States of America vs. Charles George
Trucking Company, Inc., et al, an action filed in the United States
District Court for Massachusetts. The matter has been previously
reported; see Item 3 of the Company's reports on Form 10-K for the fiscal
years ended July 31, 1994 and 1993. On September 13, 1994, the United
States Court of Appeals for the First Circuit upheld the reasonableness of
the consent agreement resolving the Company's involvement in the
litigation. In a separate related action pending in the Massachusetts
Superior Court brought by the Company against its insurers for their
failure to defend the Company and to reimburse it for its settlement
contribution in the Charles George litigation, partial summary judgment
has been granted in the Company's favor, finding that its insurers had a
duty to defend the Company.
The suit instituted against the Company by Bernard L. Friedman, a
former officer and Vice Chairman of the Company's Board of Directors,
previously reported in Item 3 of the Company's report on Form 10-K for the
fiscal year ended July 31, 1994, has been settled on mutually agreeable
terms including a credit to Analogic, as demanded in its counter claim,
for rent paid in excess of the agreed upon rent. (See also Item 13 of
this Form 10-K - Certain Relationships and Related Transactions).
The Company does not have any other material pending legal
proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
NONE
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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
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
1994 First Quarter $15.38 $13.50
Second Quarter 16.25 13.50
Third Quarter 18.12 14.62
Fourth Quarter 17.25 14.75
As of August 31, 1995, there were approximately 1,003 holders of
record of the Common Stock.
Cash dividends totaling $.08 per share were paid during fiscal year
1995 ($.04 per share was paid on March 27, 1995 and on July 14, 1995,
respectively). The policy of the Company is to retain sufficient earnings
to provide funds for the operation and expansion of its business.
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Item 6. Selected Financial Data
(Thousands of dollars, except per share data)
Year Ended July 31
1995 1994 1993 1992 1991
Total Revenues $208,827 $193,745 $177,876 $149,244 $142,563
Income from
operations 15,155 18,205 18,256 8,054 17,391
Net Income 12,706 14,657 12,445 9,910 12,239
Earnings per
common and common
equivalent share $1.02 $1.18 $1.01 $.78 $.91
Dividends paid per
common share $0.08 None None None None
Number of shares
used in computation
of per share data 12,475 12,434 12,301 12,715 13,451
Working Capital $165,799 $150,571 $139,587 $119,029 $128,727
Total Assets 260,198 239,620 223,423 196,966 190,482
Long-term debt
(including
capitalized
leases) 10,236 10,993 13,205 16,482 13,022
Stockholders'
Equity 200,893 184,391 168,907 155,859 157,316
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Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
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.
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.
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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.
(See note 4 of notes to consolidated financial statements.)
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 4 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.
Fiscal 1994 Compared to Fiscal 1993
Product, service, engineering, and licensing revenues for fiscal 1994 were
$179,951,000 as compared to $165,001,000 for fiscal 1993. The increase of
$14,950,000 was principally due to an increase in sales of Medical
Technology Products of $23,578,000 offset by decreased sales of Signal
Processing Technology Products of $7,448,000 and Industrial Technology
Products of $1,180,000. The increase in Medical Technology Products sales
are primarily due to the inclusion of B&K. Other operating revenue of
$9,166,000 and $8,556,000 represented revenue from the Hotel operation for
fiscal 1994 and 1993, respectively.
The percentage of total cost of sales to total net sales for fiscal 1994
and 1993 was 55%. Operating costs associated with the Hotel for fiscal
years 1994 and 1993 were $5,258,000 and $5,095,000, respectively.
16
General and administrative and selling expenses increased $7,282,000
primarily due to the inclusion of B&K. Research and product development
expenses increased $466,000 due to the addition of staff supporting new
medical technology product development programs.
Computer software costs of $3,305,000 and $2,127,000 were capitalized in
fiscal 1994 and 1993, respectively. Amortization of capitalized software
amounted to $1,602,000 and $1,218,000 in fiscal 1994 and 1993,
respectively.
The amortization of the excess of cost over fair value of net assets
acquired from Camtronics was $208,000 and $184,000 in fiscal 1994 and
1993, respectively. The amortization of the excess of cost over fair
value of net assets acquired from SKY was $179,000 and $177,000 in fiscal
1994 and 1993, respectively.
The amortization of excess of fair value of net assets over cost acquired
from B&K was $577,000 and $266,000 in fiscal 1994 and 1993, respectively.
During fiscal 1994 and 1993, 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 and 1993, the Company's
investment was reduced by a cash dividend received of $300,000 and
$500,000, respectively.
Equity in net losses of an unconsolidated affiliate located in Canada,
amounted to $595,000 and $1,700,000 during fiscal 1994 and 1993,
respectively. (See Note 4 of notes to consolidated financial statements.)
Minority interest in the net income of the Company's consolidated
subsidiary, Camtronics, in fiscal 1994 and 1993 amounted to $1,157,000 and
$1,166,000, respectively.
Minority interest in the net losses of a domestic subsidiary in fiscal
1994 and 1993 amounted to $177,000 and $435,000, respectively. The
Company ceased operations of this sales and marketing organization during
the third quarter of fiscal 1994. No significant financial impact is
anticipated on the Company's future financial results.
Minority interest in the net income of the Company's consolidated foreign
subsidiary, B&K, in fiscal 1994 was $935,000. During Fiscal 1993,
minority interest in the net loss of B&K was $169,000.
The effective tax rate for fiscal 1994 was 16% vs. 30% for fiscal 1993.
The decrease is primarily due to a tax loss benefit related to the
dissolution of a foreign subsidiary for which there was no impact on
income before income taxes.
Net income for fiscal 1994 was $14,657,000, or $1.18 per share as compared
with $12,445,000, or $1.01 per share for fiscal 1993.
17
Financial Position
The Company's balance sheet at July 31, 1995, reflects a current ratio of
6.4 to 1, compared to 6.8 to 1 at July 31, 1994. Cash, cash equivalents
and marketable securities, along with accounts and notes receivable,
constitute approximately 74% of current assets at July 31, 1995.
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 .30 to 1 at
July 31, 1995 and 1994.
Capital expenditures for fiscal 1995 totaled approximately $8,217,000.
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: 19,200 shares during fiscal 1995 at an aggregate cost of
$326,000; 97,800 shares during fiscal 1994 at an aggregate cost of
$1,543,000 and 121,200 shares during fiscal 1993 at an aggregate cost of
$1,363,000.
Impact of Inflation
Overall, inflation has not had a material impact on the Company's
operations during the past three fiscal years.
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
18
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 31, 1995
Bernard M. Gordon 68 1969 1998 Chairman of the
Board and Chief
Executive Officer
Bruce R. Rusch 52 1993 1997 President and Chief
Operating Officer
John A. Tarello 64 1979 1998 Senior Vice
President and
Treasurer
M. Ross Brown 61 1984 1996 Vice President
Edward F. Voboril 52 1990 1996 ----
Gerald L. Wilson 56 1980 1998 ----
Bruce W. Steinhauer 60 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.
19
(b) Executive Officers
Name Age Office Held Has been Held
Bernard M. Gordon 68 Chairman of the Board and 1969
Chief Executive Officer
Bruce R. Rusch 52 President and Chief 1995
Operating Officer
John A. Tarello 64 Senior Vice President 1980 & 1985,
and Treasurer respectively
M. Ross Brown 61 Vice President 1984
Julian Soshnick 63 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.
20
Bruce R. Rusch was appointed a Vice President of the Company in
January 1993 and President in January 1995. Mr. Rusch had been President
of SKY Computers, Inc. since 1987 until 1993. SKY Computers, Inc. was
acquired by Analogic effective April 1, 1992.
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. He also served as Vice President of
Technology and Manufacturing for Carrier Corporation during 1991 and 1992.
Edward F. Voboril is President and CEO of Wilson Greatbatch Ltd.
of Clarence, New York. For three years ending in 1989, he was a Vice
President of PPG Industries.
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
The Company is unaware of any failure to file on a timely basis
any reports required by Section 16(a) of the Exchange Act by any
"reporting person," pursuant to Item 405 of Regulation S-K.
21
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 ($)(B)(A) #(E) ($)(F)
Bernard M. Gordon 1995 $325,000 $50,000 $375,000 --- --- $3,186
Chairman (CEO) 1994 300,000 50,000 350,000 --- --- 4,698
1993 285,000 35,000 320,000 --- --- 3,997
Bruce R. Rusch 1995 $206,519 $35,000 $241,519 --- --- $3,007
President (COO) 1994 159,958 47,000 206,958 --- --- ---
1993 139,000 20,000 159,000 635,625 --- ---
John A. Tarello 1995 $210,000 $35,000 $245,000 --- --- $3,225
Senior Vice President 1994 195,000 35,000 230,000 --- --- 3,842
and Treasurer 1993 185,000 30,000 215,000 595,000 (C) 10,000 3,355
M. Ross Brown 1995 $185,000 $30,000 $215,000 --- --- $3,076
Vice President 1994 175,000 30,000 205,000 --- --- 3,316
1993 165,000 25,000 190,000 446,250 10,000 2,887
Julian Soshnick 1995 $185,000 $30,000 $215,000 --- --- $3,106
Vice President and 1994 175,000 30,000 205,000 --- --- 3,345
General Counsel 1993 165,000 25,000 190,000 520,625 (D) 5,000 2,912
22
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, 1995, the following table reflects the aggregate stock
bonus awards for which transfer restrictions have not yet lapsed:
Shares Market Value
Bruce R. Rusch 45,000 $635,625
John A. Tarello 10,000 148,750
M. Ross Brown 30,000 446,250
Julian Soshnick 26,250 390,469
(C) Represents a stock grant of 40,000 shares on March 12, 1993.
Transfer restrictions, with respect to 25% of the shares granted,
lapsed on May 20, 1993, May 20, 1994 and May 20, 1995, respectively.
Transfer restrictions with respect to the remaining 25% of the shares
will lapse on May 20, 1996.
(D) Represents a stock grant of 35,000 shares on March 12, 1993.
Transfer restrictions with respect to 25% of the shares lapsed on
August 17, 1994. Transfer restrictions, with respect to 25% of the
shares granted, will lapse on August 17, 1995, August 17, 1996, and
August 17, 1997, respectively.
23
(E) Represents options granted pursuant to the Key Employee Stock Option
Plan dated March 14, 1983, as amended and restated January 28, 1987.
Details of stock options are more fully explained in the following
two tables.
(F) 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.
24
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, 1995; 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 5,000 $40,625 7,500 2,500 $30,928 $10,312
M. Ross Brown --- --- 2,500 7,500 $10,312 $30,938
Julian Soshnick --- --- 1,250 3,750 $5,156 $15,469
___________________________________
(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 exercise, or July 31, 1995, in the case of the unrealized
values and the applicable exercise prices.
(B) "In-the-money" options are options whose exercise price was less than the market price of Common Shares
at July 31, 1995.
25
Compensation of Directors
Each director who is not an employee of the Company is entitled to
an annual fee of $8,000 plus a fee of $500 per meeting 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 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.
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.
Pursuant to the 1988 Plan, the Company granted options to purchase
5,000 shares to Mr. Wilson on February 1, 1988, at an option price of $7.125
per share; to Mr. Voboril on June 21, 1991, at an option price of $10.875;
and to Mr. Steinhauer on October 8, 1993, at an option price of $14.75 per
share. As of August 31, 1995, Mr. Wilson had exercised 4,000 shares and
1,000 shares remained exercisable; Mr. Voboril was entitled to exercise 5,000
shares; and Mr. Steinhauer was entitled to exercise 1,667 shares.
26
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 31, 1995:
Amount of Nature of Percent
Name and Address Beneficial Ownership of Class
Bernard M. Gordon Charitable 4,720,192 shares (1)(2) 38.0% (1)(2)
Remainder Unitrust
Bernard M. Gordon
Julian Soshnick
Gerald P. Bonder, Trustees
8 Centennial Drive
Peabody, MA 01960
FMR Corporation 1,398,900 shares (3) 11.3% (3)
82 Devonshire Street
Boston, MA 02109
Private Capital Management Inc. 887,475 shares (3) 7.1% (3)
3003 Ninth Street
Naples, FL 33940
__________________________________
(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 FMR Corporation and
Private Capital Management Inc.that in their capacity as investment
advisors they may be deemed a beneficial owner on August 31, 1995, of
1,398,900 shares, or 11.3% of the Company's Common Stock and
887,475 shares, or 7.1% of the Company's Common Stock, respectively.
27
(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 31, 1995:
Amount and Nature of Percent
Identity of Person Beneficial Ownership(1) of Class
Bernard M. Gordon 4,720,192 shares (2)(3) 38.0%
Bruce R. Rusch 45,000 shares (4) *
John A. Tarello 40,000 shares (4)(5) *
M. Ross Brown 35,000 shares (4) *
Gerald L. Wilson 2,000 shares (5) *
Edward F. Voboril 5,000 shares (5) *
Bruce W. Steinhauer 1,667 shares (5)
All Directors and Executive
Officers as a group
(8 persons) 4,876,359 shares (4)(5) 39.2%
*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).
28
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, 1997, 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
current annual rent for this facility is $315,000. The terms of this lease
provide for rental adjustments every three years to reflect increases in
the cost of living. The next scheduled rent adjustment date is May 1,
1996. The legal proceedings which arose between the Company and
Mr. Friedman, in his capacity as General Partner of Audubon Realty
Trust, with respect to the amount of rent payable under the terms of
this lease has been settled, as more fully described in Item 3 of this
report, "Legal Proceedings" on Page 10.
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 6 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.
29
(b) Certain Business Relationships:
None
(c) Indebtedness of Management:
None
(d) Transactions with Promoters:
None
30
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORT ON
FORM 8-K
Page
Number
a) 1. Financial Statements
Report of independent accountants 32
Consolidated balance sheets at
July 31, 1995 and 1994 33 - 34
Consolidated statements of income
for the years ended July 31,
1995, 1994, and 1993 35
Consolidated statements of stockholders'
equity for the years ended July 31, 1995,
1994, and 1993 36 - 39
Consolidated statements of cash flows for the
years ended July 31, 1995, 1994, and 1993 40 - 41
Notes to consolidated financial statements 42 - 58
2. Financial Statement Schedule
II - Valuation and qualifying accounts 59
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 60 - 64
(b) Report on Form 8-K
No reports on Form 8-K were filed by the registrant during
the quarter ended July 31, 1995.
31
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 5, 1995
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 5, 1995 /s/ Bernard M. Gordon
Chairman of the Board,
Chief Executive Officer and Director
Date: October 5, 1995 /s/ Bruce R. Rusch
President,
Chief Operating Officer and Director
Date: October 5, 1995 /s/ John A. Tarello
Senior Vice President, Treasurer
and Director
Date: October 5, 1995 /s/ M. Ross Brown
Vice President and Director
Date: October 5, 1995 /s/ Gerald L. Wilson
Director
32
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, 1995 and 1994
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, 1995. 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 audits to obtain reasonable assurance about whether the financial
statement 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, 1995 and 1994,
and the results of its operations and its cash flows for each of the
three years in the period ended July 31, 1995 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, present
fairly, in all material respects, the information required to be included
therein.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
September 8, 1995
33
Analogic Corporation and Subsidiaries
Consolidated Balance Sheets (000 omitted)
JULY 31,
1995 1994
Assets
Current assets:
Cash and cash equivalents $12,404 $23,571
Marketable securities, at market 87,398 70,825
Accounts and notes receivable,
net of allowance for doubtful accounts
(1995, $1,361 ; 1994, $1,339) 43,980 34,678
Accounts receivable, affiliate 1,232 961
Inventories 46,287 41,169
Prepaid expenses and other current assets 5,108 5,536
Total current assets 196,409 176,740
Property, plant and equipment, at cost:
Land and land improvements 4,252 4,252
Buildings 36,768 36,529
Property under capital leases 6,841 6,841
Leasehold and capital lease improvements 2,158 2,158
Manufacturing equipment 60,850 55,904
Furniture and fixtures 18,642 17,438
Motor vehicles 1,206 897
130,717 124,019
Less accumulated depreciation and
amortization 80,955 76,088
49,762 47,931
Investments in and advances to
affiliated companies 6,574 7,977
Excess of cost over acquired net assets,
net of accumulated amortization 681 1,347
Other assets, including unamortized
software costs (1995, $6,413 ;
1994, $5,244) 6,772 5,625
$260,198 $239,620
The accompanying notes are an integral part of these financial statements
34
Analogic Corporation and Subsidiaries
Consolidated Balance Sheets (000 omitted)
JULY 31,
1995 1994
Liabilities and Stockholders' Equity
Current liabilities:
Mortgage and other notes payable $365 $1,975
Obligations under capital leases 393 357
Accounts payable, trade 12,467 7,568
Accrued employee compensation
and benefits 9,008 8,639
Accrued expenses 6,545 6,298
Accrued income taxes 1,832 1,332
Total current liabilities 30,610 26,169
Long-term debt:
Mortgage and other notes payable 7,016 7,381
Obligations under capital leases 3,220 3,612
10,236 10,993
Deferred income taxes 4,683 4,128
Minority interest in subsidiaries 12,489 12,120
Excess of acquired net assets over cost, net 1,287 1,819
Commitments
Stockholders' equity:
Common stock, $.05 par; authorized
30,000,000 shares; issued 1995, 13,691,925
shares; issued 1994, 13,602,325 shares 685 680
Capital in excess of par value 20,517 19,911
Retained earnings 191,938 180,222
Unrealized holding gains and losses 2,004
Cumulative translation adjustments 2,846 558
217,990 201,371
Less:
Treasury stock, at cost (1995, 1,269,280
shares; 1994, 1,253,268 shares) 14,470 14,233
Unearned compensation 2,627 2,747
Total stockholders' equity 200,893 184,391
$260,198 $239,620
The accompanying notes are an integral part of these financial statements
35
Analogic Corporation and Subsidiaries
Consolidated Statements of Income (000 omitted, except share data)
YEARS ENDED JULY 31,
1995 1994 1993
Revenues:
Product and service, net $187,964 $177,175 $160,764
Engineering and licensing 6,070 2,776 4,237
Other operating revenue 9,720 9,166 8,556
Interest and dividend income 5,073 4,628 4,319
Total revenues 208,827 193,745 177,876
Cost of sales and expenses:
Cost of sales:
Product and service 108,203 95,506 87,439
Engineering and licensing 2,769 2,929 2,850
Other operating expenses 5,294 5,258 5,095
General and administrative 17,188 15,492 14,918
Selling 29,066 29,278 22,570
Research and product development 29,890 26,100 25,634
Interest expense 812 1,167 1,019
Loss on foreign exchange 666
Amortization of excess of cost over
acquired net assets 317 387 361
Amortization of excess of acquired
net assets over cost (533) (577) (266)
Total cost of sales and expenses 193,672 175,540 159,620
Income from operations 15,155 18,205 18,256
Gain on sale of marketable securities 1,736
Equity in net income (losses) of
unconsolidated affiliates 1,405 300
Income before income taxes 16,891 19,610 18,556
Provision for income taxes 3,667 3,038 5,549
Minority interest in net income of
consolidated subsidiaries 518 1,915 562
Net income $12,706 $14,657 $12,445
Earnings per common and common
equivalent share $1.02 $1.18 $1.01
The accompanying notes are an integral part of these financial statements.
36
Analogic Corporation and Subsidiaries Consolidated Statements of Stockholders'
Equity - Years Ended July 31, 1995, 1994, and 1993 (000 omitted, except share
data) Common stock Capital in
excess of
Shares Amount par value
Balance, July 31, 1992 13,146,758 $657 $14,516
Shares issued pursuant to
stock grants, net of cancellations 188,750 10 2,669
Shares issued pursuant to
stock options 182,091 9 1,182
Purchases of treasury stock
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan (5)
Income tax reduction relating
to stock options 445
Translation adjustments for the year
Net income for the year
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
Unrealized holding gains and
losses for the period
Other 19 (582)
Balance, July 31, 1995 13,691,925 $685 $20,517
37
Analogic Corporation and Subsidiaries Consolidated Statements of Stockholders'
Equity - Years Ended July 31, 1995, 1994 and 1993 (000 omitted, except share
data) (continued) Unrealized Cumulative
Retained holding translation
earnings gains and losses adjustments
Balance, July 31, 1992 $153,120
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 (614)
Net income for the year 12,445
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 (991)
Unrealized holding gains and
losses for the period 2,004
Other
Balance, July 31, 1995 $191,938 $2,004 $2,846
38
Analogic Corporation and Subsidiaries Consolidated Statements of Stockholders'
Equity - Years Ended July 31, 1995, 1994 and 1993 (000 omitted except share
data) (continued) Treasury stock
Shares Amount
Balance, July 31, 1992 (1,078,751) ($12,020)
Shares issued pursuant to
stock grants, net of cancellations (9,375)
Shares issued pursuant to
stock options 43,721 475
Purchases of treasury stock (121,200) (1,363)
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 7,844 86
Income tax reduction relating
to stock options
Translation adjustments for the year
Net income for the year
Balance, July 31, 1993 (1,157,761) (12,822)
Shares issued pursuant to
stock grants, net of cancellations (10,000)
Shares issued pursuant to
stock options 5,000 54
Purchases of treasury stock (97,800) (1,543)
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 7,293 78
Income tax reduction relating
to stock options
Translation adjustments for the year
Net income for the year
Balance, July 31, 1994 (1,253,268) (14,233)
Shares issued pursuant to
stock grants, net of cancellations (5,000)
Shares issued pursuant to
stock options
Purchases of treasury stock (19,200) (326)
Amortization of
unearned compensation
Amounts related to employee
stock purchase plan 8,188 89
Income tax reduction relating
to stock options
Translation adjustments for the year
Net income for the year
Dividends paid
Unrealized holding gains and
losses for the period
Other
Balance, July 31, 1995 (1,269,280) ($14,470)
39
Analogic Corporation and Subsidiaries Consolidated Statements of Stockholders'
Equity - Years Ended July 31, 1995, 1994 and 1993 (000 omitted, except share
data) (continued) Total
Unearned stockholders
compensation equity
Balance, July 31, 1992 ($414) $155,859
Shares issued pursuant to
stock grants, net of cancellations (2,679)
Shares issued pursuant to
stock options 1,666
Purchases of treasury stock (1,363)
Amortization of
unearned compensation 388 388
Amounts related to employee
stock purchase plan 81
Income tax reduction relating
to stock options 445
Translation adjustments for the year (614)
Net income for the year 12,445
Balance, July 31, 1993 (2,705) 168,907
Shares issued pursuant to
stock grants, net of cancellations (698)
Shares issued pursuant to
stock options 346
Purchases of treasury stock (1,543)
Amortization of
unearned compensation 656 656
Amounts related to employee
stock purchase plan 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 (2,747) 184,391
Shares issued pursuant to
stock grants, net of cancellations (610)
Shares issued pursuant to
stock options 432
Purchases of treasury stock (326)
Amortization of
unearned compensation 730 730
Amounts related to employee
stock purchase plan 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 (991)
Unrealized holding gains and
losses for the period 2,004
Other (582)
Balance, July 31, 1995 ($2,627) $200,893
The accompanying notes are an integral part of these financial statements.
40
Analogic Corporation and Subsidiaries
Consolidated Statements of Cash Flows (000 omitted)
YEARS ENDED JULY 31,
1995 1994 1993
Cash flows from operating activities:
Net income $12,706 $14,657 $12,445
Adjustments to reconcile net income
to net cash provided by operating
activities:
Deferred income taxes 255 920 (53)
Depreciation 6,365 6,598 7,725
Amortization of capitalized software 2,355 1,602 1,218
Amortization of excess of cost over net
acquired assets 317 387 361
Amortization of excess of acquired net
assets over cost (533) (577) (266)
Amortization of other assets (deferred
charges) 39 3 48
Minority interest in net income of
consolidated subsidiaries 518 1,915 562
Provision for losses on accounts
receivable 21 (179) 120
Gain on sale of marketable securities (1,736)
Loss (gain) on sale of equipment (34) (30) 140
Excess of equity in losses (income) of
unconsolidated affiliates over
dividend received (1,105) 200
Compensation from stock grants 731 656 388
Changes in operating assets &
liabilities Decrease (increase)
in assets:
Accounts and notes receivable (8,561) (3,543) 6,733
Inventories (5,118) (1,229) 1,876
Prepaid expenses and other current
assets (305) 75 886
Other assets (17) 74 (138)
Increase (decrease) in liabilities:
Accounts payable, trade 4,899 (928) (232)
Accrued expenses and other current
liabilities 816 801 (5,723)
Accrued income taxes 501 (762) 1,205
Total adjustments 513 4,678 15,050
Net cash provided by operating activities 13,219 19,335 27,495
Cash flows from investing activities:
Investments in and advances to affiliated
companies (143) (1,583) (2,239)
Additions to property, plant and equipment (8,217) (7,326) (4,425)
Capitalized software (3,524) (3,305) (2,127)
Proceeds from sale of property, plant and
equipment 55 114 64
Purchases of marketable securities (24,062) (12,600) (70,350)
Maturities of marketable securities 10,475 9,115 63,625
41
Analogic Corporation and Subsidiaries
Consolidated Statements of Cash Flows (000 omitted) (continued)
YEARS ENDED JULY 31,
1995 1994 1993
Acquisition of businesses, net of cash
acquired 3,239
Proceeds from sale of marketable securities 2,300
Net cash used by investing activities (23,116) (15,585) (12,213)
Cash flows from financing activities:
Payments on debt and capital lease
obligations (2,331) (631) (6,946)
Purchase of common stock for treasury (325) (1,543) (1,363)
Purchase of common stock of majority owned
subsidiary (582) (201) (513)
Issuance of common stock pursuant to stock
options and employee stock purchase plan 672 542 2,191
Dividends paid shareholders (992)
Net cash used by financing activities (3,558) (1,833) (6,631)
Effect of exchange rate changes on cash 2,288 1,172
Net increase (decrease) in cash and cash
equivalents (11,167) 3,089 8,651
Cash and cash equivalents, beginning of year 23,571 20,482 11,831
Cash and cash equivalents, end of year $12,404 $23,571 $20,482
The accompanying notes are an integral part of these financial statements.
42
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.
Product, service, engineering and licensing export revenue, primarily from
customers in Europe and Asia, amounted to approximately $65,200,000
or 34%, $60,800,000 or 34%, and $66,900,000 or 41% of total product,
service, engineering and licensing revenue for the years ended July 31,
1995, 1994 and 1993, 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.
43
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. Summary of business operations and significant accounting policies:
(continued)
(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 $7,676,000 and $5,321,000 at July 31,
1995 and 1994, respectively.
(f) Warranty costs:
The Company provides for estimated warranty costs as products are
shipped.
(g) Income taxes:
The Company does not provide 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 12,475,035,
12,433,821 and 12,301,007 in fiscal 1995, 1994 and 1993,
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 $9,004,000 and $21,135,000 at July 31,
1995 and 1994, 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.
44
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
1. Summary of business operations and significant accounting policies:
(continued)
(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.
(l) 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 from 1992 through 1995
pursuant to a predetermined formula. Commencing in 1996, the
percentage of originally issued shares which a Founder may require
Camtronics to purchase shall be negotiated and agreed upon by the
Company. Absent an agreement for a higher amount, the percentage shall
be no less than 5% per year. Furthermore, 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 1995 as
a result of the Founders exercising their conversion rights to sell 5% of
their shares for the amount of $244,000, $202,000, and $513,000 during
fiscal 1995, 1994, and 1993, 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.
As of January 1, 1993, the Company acquired an interest of
approximately 57% in a newly-formed company, B&K Medical 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
45
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
2. Business combinations: (continued)
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
results from 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 $1,376,000 and $843,000 as of July 31, 1995
and 1994, respectively.
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 $597,000 and $418,000 as of July
31, 1995 and 1994, respectively.
3. Inventories:
The components of inventory are as follows:
July 31
1995 1994
Raw materials $18,883,000 $16,711,000
Work-in-process 16,037,000 14,982,000
Finished goods 11,367,000 9,476,000
$46,287,000 $41,169,000
4. 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 each of the fiscal
years 1994 and 1993 and the Company did not report any income in fiscal
1995 related to this investment. Dividends received from Scientific
46
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. Investments in and advances to affiliated companies: (continued)
amounted to $300,000 in fiscal 1994 and $500,000 in fiscal 1993. No
dividends were received in fiscal 1995. The carrying value of this
investment was $5,700,000 at July 31, 1995 and 1994. Transactions with
Scientific for fiscal years 1995, 1994 and 1993 consisted of revenues of
approximately $1,076,000, $2,990,000 and $2,542,000, respectively. At
July 31, 1995 and 1994, accounts receivable from this affiliate were
$1,232,000 and $961,000, respectively.
On August 14, 1992, Analogic invested $1,052,000 for a 34% interest in
a privately-held company located in Canada. This company is in the
business of designing, manufacturing and distributing medical electronic
equipment. Subsequent to August 14, 1992, the Company invested an
additional $1,187,000 increasing its equity interest to 41.5% as of July 31,
1993. During the first quarter of fiscal 1994, the Company invested an
additional $760,000 increasing its equity interest to 44%. In connection
with this investment, a charge of $595,000 and $1,700,000 resulting from
the Company's share of losses had been recorded in fiscal 1994 and 1993,
respectively.
During January, 1994, the Company transferred its 44% interest in the
privately-held company to Park Meditech, Inc. ("Park"), located in
Toronto, Canada in exchange for 6,000,000 shares of Park common stock
plus 1,000,000 common stock warrants. Each warrant is exercisable at the
price of $5.00 (Canadian) into one share of Park common stock, and may
be exercised through April 1996. During April, 1994, the Company
purchased 300,000 units of Park for $824,000. Each unit consists of one
common share of Park stock and one-half of a Share Warrant. Each
Share Warrant is convertible to one common share of Park for a price of
$4.00 (Canadian) on or before December 15, 1995.
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 is
convertible, at the option of the Company, into 600,000 common shares
of Park stock until June 1, 1996. In addition, the Company has warrants
convertible to 200,000 common shares of Park stock at a price of $2.50
(US) until June 1, 1997.
During July, 1995 the Company sold 2,300,000 common shares of Park
Common stock for a net price of $1.00 per share resulting in a gain of
$1,736,000. The Company currently owns 4,000,000 shares or
approximately 15% of the outstanding shares of Park.
47
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
4. Investments in and advances to affiliated companies: (continued)
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, 1995.
During fiscal 1991, the Company invested $750,000 for a 25% interest in
a limited partnership which owns approximately 41% interest in a
company which designs, manufactures and distributes electronic medical
imaging equipment. The investment in the limited partnership is
accounted for using the cost method, as the Company is a limited partner,
and accordingly, has no influence over the partnership.
48
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Mortgage and other notes payable:
Mortgage and other notes payable consists of the following:
July 31
1995 1994
3% mortgage note payable, due 2017,
payable quarterly, collateralized by
land, office and manufacturing
facilities $ 5,699,000 $5,877,000
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 1,650,000 1,800,000
11% unsecured term loan, principal and
interest payments due December 31, 1994 1,605,000
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 74,000
7,381,000 9,356,000
Less current portion 365,000 1,975,000
$ 7,016,000 $ 7,381,000
Principal maturities in each of the next five fiscal years on the above
notes are as follows: 1996, $365,000; 1997, $339,000; 1998, $344,000;
1999, $350,000; 2000, $356,000.
49
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
6. 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 1995, 1994 and 1993.
One of the Company's wholly-owned subsidiaries leases certain
machinery and equipment under capital lease agreements which expire in
1996.
Property under capital leases is included in property, plant and equipment,
as follows:
July 31
1995 1994
Land and buildings $ 6,251,000 $ 6,251,000
Machinery and equipment 590,000 590,000
6,841,000 6,841,000
Less accumulated amortization 5,017,000 4,692,000
Net capital lease assets $ 1,824,000 $ 2,149,000
Certain of the Company's subsidiaries lease manufacturing and office
space under non-cancelable operating leases. These leases expire through
1998 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 $610,000, $814,000 and $329,000 (net of
sublease income of $1,179,000, $1,199,000 and $1,103,000) in fiscal
1995, 1994 and 1993, respectively.
50
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
6. Lease commitments and related party transactions: (continued)
The following is a schedule by year of future minimum lease payments
at July 31, 1995:
Capital Operating
Fiscal Year Leases Leases
1996 $812,000 $ 910,000
1997 812,000 652,000
1998 812,000 621,000
1999 812,000 289,000
2000 812,000 40,000
Last years
(through 2003) 1,390,000
$5,450,000 $2,512,000
Less amount representing
interest, at 9.5% - 17.6% 1,837,000
Present value of minimum lease
payments (includes current
portion of $393,000) $3,613,000
Future minimum lease payments under capital leases have not been
reduced for sublease rental income of approximately $1,179,000.
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.
7. Stock option and stock bonus plans:
At July 31, 1995, 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.
51
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Stock option and stock bonus plans: (continued)
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 $730,000, $656,000 and $388,000 was recorded in fiscal 1995, 1994
and 1993, 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 8,188 in
1995, 7,293 in 1994 and 7,844 in 1993.
At July 31, 1995, 1,108,162 shares were reserved for grant under the
above stock option, bonus and purchase plans.
52
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. Stock option and stock bonus plans: (continued)
The following table sets forth the stock option transactions
for the years ended July 31, 1995, 1994 and 1993:
1995 1994 1993
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-$18.00 359,729 $7.125-$16.125 325,955 $7.125-$14.00 519,130
Options
granted 16.50-18.25 164,850 14.750-18.00 109,125 10.875-16.125 82,950
Options
exercised 7.125-11.75 (50,081) 7.125-14.00 (40,976) 7.125-14.00 (225,812)
Options
cancelled (27,996) (34,375) (50,313)
Options
outstanding,
end of year 7.125-18.25 446,502 7.125-18.00 359,729 7.125-16.125 325,955
Options
exercisable,
end of year 7.125-16.50 140,406 7.125-11.75 113,791 7.125-14.875 113,458
8. 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 1995, $660,000 in 1994 and $600,000 in
1993.
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.
53
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
9. Interest:
Total interest incurred amounted to $988,000, $1,261,000 and $1,089,000 in
1995, 1994 and 1993, respectively, of which $176,000 in 1995, $94,000 in 1994
and $70,000 in 1993 was capitalized.
10. Income taxes:
The components of the provision for income taxes are as follows:
July 31
1995 1994 1993
Current income taxes:
Federal $ 2,795,000 $ 1,746,500 $4,491,000
State and Foreign 617,000 371,000 1,111,000
3,412,000 2,117,500 5,602,000
Deferred income taxes (benefit):
Federal 291,000 915,000 ( 39,000)
State and foreign ( 36,000) 5,000 ( 14,000)
255,000 920,000 ( 53,000)
$3,667,000 $ 3,037,500 $5,549,000
The tax effects of the principal temporary differences resulting in
deferred tax expense (benefit) are as follows:
July 31
1995 1994 1993
Unrealized equity
gain/loss $493,000 $424,000 ( $78,000)
Capitalized software 151,000 325,000 99,000
Depreciation 306,000 370,000 ( 6,000)
Bad debts 17,000 6,000 ( 12,000)
Inventory valuation ( 42,000) ( 11,000) ( 56,000)
Benefit Plans ( 486,000) ( 18,000) 79,000
Other items, net ( 184,000) ( 176,000) ( 79,000)
$ 255,000 $ 920,000 ($ 53,000)
Income (loss) before income taxes from domestic and foreign operations
is as follows:
July 31
1995 1994 1993
Domestic $17,942,000 $17,356,000 $19,686,000
Foreign (1,051,000) 2,254,000 (1,130,000)
$16,891,000 $19,610,000 $18,556,000
54
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. Income taxes: (continued)
The components of the deferred tax assets and liabilities are as follows:
Deferred Tax Deferred Tax
Assets Liabilities
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 carryforwards 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
July 31, 1994
Depreciation $ 2,308,000
Bad debt allowance $ 162,000
Capitalized interest and other costs 289,000 440,000
Inventory 403,000
Warranty 518,000
Benefit plans 684,000
Lease transactions 737,000
Unrealized equity gain/loss 890,000 1,628,000
Capitalized software 1,701,000
Business credit carry forwards 483,000
Alternative minimum tax credit
carryforwards 1,086,000
Miscellaneous 210,000
5,462,000 6,077,000
Valuation allowance ( 1,384,000)
$ 4,078,000 $ 6,077,000
Included in prepaid expenses and other current assets is $2,429,000 and
$2,129,000 of current deferred tax assets at July 31, 1995 and 1994,
respectively.
55
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. Income taxes: (continued)
A reconciliation of income taxes at the United States statutory rate to
the effective tax rate follows:
Year Ended July 31,
1995 1994 1993
U.S. federal statutory tax rate 35% 35% 35%
Tax loss on dissolution of foreign
subsidiary ( 9 )
Foreign sales corporation tax benefit ( 3 ) ( 2 ) ( 2 )
State income taxes, net of
federal tax benefit 1 1 1
Tax exempt interest ( 8 ) ( 6 ) ( 6 )
Net losses (profits) of
subsidiaries and affiliates
not taxed ( 1 ) 3
Alternative minimum tax 3
Other items, net ( 3 ) ( 5 ) ( 1 )
Effective tax rate 22% 16% 30%
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.
56
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
10. Income taxes: (continued)
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 research and experimental tax credits carryforwards
of approximately $742,000 expiring in various years through 2010.
57
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. Quarterly results of operations (unaudited):
The following is a summary of unaudited quarterly results of
operations for the years ended July 31, 1995 and 1994.
Total Net Earnings
revenues income per share
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
1994
quarters
First $ 46,105,000 $ 3,201,000 $ .26
Second 49,587,000 3,762,000 .30
Third 47,125,000 3,572,000 .29
Fourth 50,928,000 4,122,000 .33
Total $193,745,000 $ 14,657,000 $1.18
12. Transactions with major customers:
One export customer accounted for approximately $27,700,000 or
14%, $25,700,000 or 14% and $22,000,000 or 13% of total product,
service, engineering and licensing revenue in 1995, 1994 and 1993,
respectively. Of the total product, service, engineering and licensing
revenue, one domestic customer accounted for approximately
$21,100,000 or 11%, $23,700,000 or 13% and $23,000,000 or 14% in
1995, 1994 and 1993, respectively.
58
ANALOGIC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
13. Supplemental disclosure of cash flow information:
During fiscal years 1995, 1994 and 1993, interest paid amounted to
$1,371,000, $1,039,000 and $1,092,000, respectively.
Income taxes paid during fiscal years 1995, 1994 and 1993 amounted
to $2,802,000, $3,763,000 and $4,262,000, respectively.
14. 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. At July 31, 1995,
estimated fair values of the Company's financial instruments are as
follows:
Carrying Fair
Amount Value
Cash and cash equivalents $12,404,000 $12,404,000
Marketable securities 87,398,000 87,398,000
Mortgage and other notes payable 7,381,000 7,381,000
15. Foreign Operations
Financial information relating to the Company's foreign and domestic
operations for fiscal 1995 are as
follows:
Foreign Domestic Total
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
59
ANALOGIC CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E Column F
Additions (1)
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, 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
Year ended July 31, 1993:
Allowance for doubtful
accounts $620,000 $181,000 $778,000 ($61,000) $1,518,000
Deferred Tax Valuation Allowance 1,986,000 (636,000) 1,350,000
(1) Reserve addition from the purchase of a company
60
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
61
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
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.
62
(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, 1991
63
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
64
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
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
65
EXHIBITS
TITLE
21. List of Subsidiaries
23. Consent of Coopers & Lybrand, L.L.P.
27. Financial Data Schedule
66
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 Medical A/S Denmark
Camtronics Foreign Sales Corporation Virgin Islands
Camtronics, Ltd. Wisconsin
SKY COMPUTERS, Incorporated Massachusetts
SKY Limited England
67
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 September 8, 1995, on our audits of the
consolidated financial statements and financial statement schedule of
Analogic Corporation at July 31, 1995 and 1994, and for the years ended
July 31, 1995, 1994, and 1993, which report is included in the Annual
Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
October 3, 1995