Analogic Defies Logic: Fool by Numbers

On Sept. 26, health and security imaging expert Analogic (Nasdaq: ALOG  ) released full-year earnings for the fiscal 2006 period ended July 31.

• Net profits seem stable enough, but rest on selling off parts of the business. In 2005, the company sold a stake in Cedara Software worth $43.8 million to produce its tidy income, and this year $20.2 million of net gain were derived from the sale of the Camtronics business unit to Emageon.
• The original investment in Cedara back in 2001 was a mere $7.5 million -- not a bad return on that investment.
• Given that Analogic keeps simplifying its operations, you might expect margin improvements as operations tighten up a bit. That has not happened here, and the core business is operating at a net loss today.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	FY 2006	FY 2005	Change
Sales	$346,230	$351,445.0	$326,479.0	7.6%
Net Profit	--	$25,066.0	$28,862.0	(13.2%)
EPS	$1.06	$1.81	$2.12	(14.6%)
Diluted Shares		13853.0	13619.0	1.7%

Get back to basics with a look at the income statement.

Margin Checkup

	FY 2006	FY 2005	Change*
Gross Margin	34.47%	37.79%	(3.32)
Operating Margin	(1.49%)	0.37%	(1.86)
Net Margin	7.13%	8.84%	(1.71)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	FY 2006	FY 2005	Change
Cash + ST Invest.	$258,237.0	$220,454.0	17.1%
Accounts Rec.	$52,112.0	$50,978.0	2.2%
Inventory	$58,943.0	$64,290.0	(8.3%)

Liabilities	FY 2006	FY 2005	Change
Accounts Payable	$16,898.0	$20,359.0	(17%)
Long-Term Debt	$0.0	$0.0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

No cash flow statement provided. Boo! Hiss!

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Competitors:

• Hologic (Nasdaq: HOLX  )
• CSP Inc. (Nasdaq: CSPI  )
• Merge Technologies (Nasdaq: MRGE  )
• Curtiss-Wright (NYSE: CW  )
• Emageon (Nasdaq: EMAG  )
• TransTechnology (AMEX: BZC  )

Related Foolishness:

• Foolish Fundamentals: Margins
• Foolish Fundamentals: The Income Statement
• Can you edge out Bill Gates? Analogic founder Bernard Gordon is trying.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had positions in none of these companies. Fool rules are here .