Analogic [ALOG]
1Q18 1Q17
Sales $106.9M $121.1M
Net Inc. $5.7M, 0.45 $2.5M, 0.20
Sales fell 12% due largely declines in the Medical Imaging segment to a lesser degree on a drop in the Security and Detection segment, which was down 4% to $16.4 million. Security sales were off compared to a strong quarter a year ago and on lower service revenue. Profit more than doubled due to restructuring actions in FY ’17. Security sales in the second half of the fiscal year are expected to be strong due to international high-speed checked baggage systems and a recent $4 million contract with the U.S. Transportation Security Administration to develop algorithms for the ConneCT computed tomography checkpoint scanner. The company expects to realize $3 million of the award during FY ’18. The award also calls for delivery of prototypes. Jim Ryan, who runs Analogic’s Security and Detection segment, says on the earnings call that FY ’18 “will be a year of global airport trials” and demonstrations for the ConneCT system. The company expects early adopters beginning to purchase CT-based systems for checkpoint applications in FY ’19. He says there are 8,000 checkpoints in airports globally, including 2,400 in the U.S. For all of FY ’18 in the Security and Detection segment, Analogic expects double-digit sales growth and adjusted operating margin in the mid-teens on demand for medium and high-speed checked baggage systems. The company says its review of strategic alternatives for the business remains “active and on schedule.”