Analogic [ALOG]
3Q16 3Q15
Sales $128M $133.6M
Net Inc. $5M, 0.40 $9.1M, 0.72
Earnings tumbled 45% due to a difficult comparison with a year ago when the bottom line benefited from a tax benefit, and because of non-cash charges related to balance sheet items and a restructuring charge in the recent quarter. Adjusted operating income increased 10% on stronger gross margins and lower expenses due to reduced incentive compensation. Sales slipped 4% on lower medium-speed security system shipments for the Transportation Security Administration and delays in high-speed system shipments for international airports, while revenue from the medical equipment business was flat. Analogic says the margin mix for high-speed systems improved. The company also says there were limited Rapid DNA shipments in the quarter. Security and Detection segment revenue was $17.5 million in the quarter, down 24% from $23.1 million a year ago. Free cash flow was $11 million. In FY ’17 Analogic expects revenues from medium-speed systems to remain stable at the current run rate while the security outlook overall shows growth from “international high-speed tenders starting to flow,” Jim Green, Analogic’s president and CEO, says on the company’s earnings call. He also notes that there is more interest in the company’s computed tomography-based scanning systems for use screening carry-on bags at airport checkpoints to process travelers more quickly while also increasing threat detection capabilities.