UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Amendment No. 1 on

Form 10-Q/A

or

Commission File Number 0-6715

Analogic Corporation

(978) 977-3000
(Registrant’s telephone number, including area code)

     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 þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

     The number of shares of Common Stock outstanding at May 28, 2004 was 13,644,103.

ANALOGIC CORPORATION

QUARTERLY REPORT ON FORM 10-Q/A
FOR THE QUARTER ENDED APRIL 30, 2004
INTRODUCTORY NOTE
(in thousands, except per share data)

     Pursuant to Rule 12b-15 of the Rules and Regulations under the Securities Exchange Act of 1934, this Amendment No. 1 on Form 10-Q/A to the Quarterly Report on Form 10-Q of Analogic Corporation (the “Company”) for the quarter ended April 30, 2004 is being filed to (i) restate the Company’s Condensed Consolidated Financial Statements (Unaudited) for the quarter ended April 30, 2004 and (ii) revise related disclosures included in the Quarterly Report on Form 10-Q.

     On December 13, 2004, the Company announced that it would restate its quarterly financial statements for the quarters ended October 31, 2003, January 31, 2004 and April 30, 2004. On January 14, 2005, the Company announced that it would restate its financial statements for the fiscal years ended July 31, 2002 and 2003 and each of the interim periods within those years. The purpose of this restatement is to reflect the application of the appropriate accounting principles to (1) the recognition of software revenue and related costs by Camtronics Medical Systems, Ltd. (“Camtronics”) a wholly owned U.S. subsidiary of the Company during the periods covered by the restatement, and (2) the treatment of a license of intellectual property sold by the Company to its affiliate Shenzhen Anke High-Tech Co. Ltd (“SAHCO”) during each of the first three quarters of fiscal 2004. The restatement primarily involves a deferral of Camtronics’ revenues and associated costs from the fiscal period in which they were originally recorded to subsequent fiscal periods, and the recognition of revenue under the SAHCO license as payments are received rather than upon execution of the SAHCO license in the first quarter of fiscal 2004. As restated, the Company’s financial results for the quarter ended April 30, 2004 reflect a reduction in revenues of $3,285, net income of $631, and basic and diluted earnings per share of $0.05; and for the nine months ended April 30, 2004 reflect a reduction in revenue of $9,166, net income of $2,810, and basic and diluted earnings per share of $0.21. See Note 2, “Restatement,” of the Notes to Unaudited Condensed Consolidated Financial Statements for a more complete discussion of the restatement.

     This Amendment No. 1 amends Part I, Items 1, 2, 3 and 4, and Part II, Item 6 of the Quarterly Report of Form 10-Q for the quarter ended April 30, 2004. This Amendment No. 1 continues to reflect circumstances as of the date of the original filing of the Quarterly Report on Form 10-Q, and the Company has not updated the disclosures contained therein to reflect events that occurred at a later date, except for items relating to the restatement.

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ANALOGIC CORPORATION

TABLE OF CONTENTS

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ANALOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share data)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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ANALOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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ANALOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

1. Basis of Presentation:

     The unaudited condensed consolidated financial statements of Analogic Corporation (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the results for all periods presented. The results of the operations for the three and nine months ended April 30, 2004, are not necessarily indicative of the results to be expected for the fiscal year ending July 31, 2004, or any other interim period.

     These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended July 31, 2003, included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2004 as filed with the February 1, 2005.

     The financial statements have not been audited by independent certified public accountants. The condensed consolidated balance sheet as of July 31, 2003, contains data derived from audited financial statements.

     Certain financial statement items in the prior fiscal year have been reclassified to conform to the current year’s financial presentation format.

2. Restatement

The Company is restating its condensed financial statements for the fiscal years ended July 31, 2002 and 2003 and each of the interim periods within these fiscal years and for the quarters ended October 31, 2003, January 31, 2004 and April 30, 2004 to reflect the application of the appropriate accounting principles to (1) the recognition of software revenue by its 100% owned U.S. subsidiary Camtronics Medical Systems, Ltd. (“Camtronics”) during all periods covered by the restatement and (2) the treatment of a license of intellectual property sold by the Company to its affiliate Shenzhen Anke High Tech Co. Ltd. (“SAHCO”) during each of the first three quarters of fiscal 2004. As restated, the Company’s financial results for the quarter ended April 30, 2004 reflect a reduction in revenues of $3,285, net income of $631, and basic and diluted earnings per share of $0.05; and for the nine months ended April 30, 2004 reflect a reduction in revenue of $9,166, net income of $2,810, and basic and diluted earnings per share of $0.21, in each case as compared to the Company’s financial results previously reported for the three and nine months ended April 30, 2004. There are also resulting changes to the captions within the Net Cash Provided by Operating Activities on the Statement of Cash Flows.

          Summarized below is a more detailed discussion of the restatement affecting the quarter and nine months ended April 30, 2004 and a comparison of the amounts previously reported in the unaudited condensed balance sheets and statements of operations in the Company’s Quarterly Report Form 10-Q for the three and nine months ended April 30, 2004.

Software Revenue

          Camtronics’ revenues are derived primarily from the sales of Digital Cardiac Information Systems. System sales revenues consist of the following components: computer software licenses, computer hardware, installation support, and sublicensed software. In addition, Camtronics generates revenues related to system sales for software support, hardware maintenance, training, consulting and other professional services.

          Camtronics recognizes revenue in accordance with the provisions of American Institute of Certified Public Accountants (“AICPA”) Statement of Position 97-2, “Software Recognition” (“SOP 97-2”). SOP 97-2 requires revenue earned on software arrangements involving multiple-elements to be allocated to each element based on the

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fair values of those elements or by use of the residual method. Under the residual method, revenue is recognized in a multiple-element arrangement when vendor-specific objective evidence (“VSOE”) of fair value exists for all the undelivered elements in the arrangement, which is determined by the price charged when that element is sold separately (i.e. professional services, software support, hardware maintenance, hardware and sublicensed software), but does not exist for one or more of the delivered elements in the arrangement (i.e. software solutions). Specifically, Camtronics determines the VSOE of fair value of the maintenance portion of the arrangement based on the renewal price of the maintenance charged to clients; determines the VSOE of fair value of the professional services portion of the arrangement, other than installation services, based on hourly rates which Camtronics charges for these service when sold apart from a software license; and determines the VSOE of fair value of the hardware and software sublicenses based on the prices for these elements when they are sold separately from the software. If evidence of the VSOE of fair value cannot be established for the undelivered elements of a license agreement, the entire amount of revenue under the arrangement is deferred until these elements have been delivered or the VSOE of fair value for the remaining undelivered elements is established.

          Inherent in the revenue recognition process are significant management estimates and judgments, which influence the timing and amount of revenue recognition. In particular, the application of SOP 97-2 requires judgment concerning whether a software arrangement includes multiple elements; if so, whether all such elements have been delivered; and if not, whether VSOE of fair value exists for the undelivered elements.

          The restatements are required due to the incorrect application of software revenue recognition procedures with respect to certain Camtronic’s transactions. Under software revenue recognition rules, revenue cannot be recognized on a multiple-element software arrangement until such time as Camtronics has delivered or performed all elements of the arrangement or has VSOE of fair value for each undelivered or non-performed element of the arrangement. In the majority of the transactions underlying the restatement, Camtronics has delivered and the customer has paid for the software. However, revenue cannot be recognized from the transactions because some element of the transaction – such as the delivery of a software upgrade or the performance of customization services – has not been delivered or performed and VSOE of fair value for those elements cannot be determined.

License of intellectual property

          During the first quarter of fiscal 2004, the Company recorded engineering revenue of $2,775 in connection with the sale of a license of intellectual property to the Company’s affiliate SAHCO. The contract agreement between the Company and SAHCO provided for extended payment terms whereby SAHCO was required to make a payment of $500 within the first 30 days from the date of the contract and the balance over the next twelve months. Upon further review of the agreement, the Company has determined that this license revenue should have been recorded as the payments were received from SAHCO and not in its entirety at the date of the contract because collectibility was not reasonably assured. The Company received a total of $1,750 from SAHCO during fiscal 2004, and received an additional $750 during the quarter ended October 31, 2004.

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          The following tables show the effect of the restatements on the Company’s Statements of Operations and Balance Sheets.

Statements of Operations:

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Statements of Operations components increased (decreased) as a result of the following:

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Statements of Operations:

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Statements of Operations components increased (decreased) as a result of the following:

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Balance Sheets:

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     The increases (decreases) to the balance sheet components are due to (1) current period recognition of the effect of current period restatement for deferral of revenue and related costs, and the effect of current period revenue related to the license sale; and (2) the cumulative effect at the beginning of the quarter of the restatement of prior periods for similar matters. On a net basis the balance sheet components increased (decreased) due to the following:

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3. Stock-based compensation:

     As permitted by Statement of Financial Accounting Standards No. 148 (“SFAS 148”), “Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB statement No. 123,” and Statement of Financial Accounting Standards No. 123 (“SFAS 123”) “Accounting for Stock-Based Compensation,” the Company continues to apply the accounting provisions of the Accounting Principle Board (“APB”) No. 25, and related interpretations, with regard to the measurement of compensation cost for options granted to employees and directors of the Company under the Company’s equity compensation plans.

     If the Company had adopted the fair value method described in SFAS 123, the results of operations would have been reported as follows:

4. Balance sheet information:

     Additional information for certain balance sheet accounts is as follows for the periods indicated:

5. Acquisition of assets:

     On October 20, 2003, Analogic’s 100% owned subsidiary Camtronics Medical Systems Ltd. (“Camtronics”) acquired certain assets from Quinton, Inc. (“QTN”), a Washington corporation, primarily related to intellectual property rights and interests associated with QTN’s Q-Cath hemodynamics and monitoring system business. Camtronics’ decision to acquire these assets and liabilities was based on its desire to expand its current product offerings and gain access to QTN’s existing customer base. The Company’s total investment amounted to $1,750,

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with payments of $1,000 due at closing and $750 due one year from the closing date. In connection with the above transaction, the parties also entered into a Cooperative Marketing Agreement. The Cooperative Marketing Agreement, which has a term of four years, provides for QTN to potentially earn up to an additional $1,500 in commissions upon the successful conversion of QTN Q-Cath systems to Camtronics’ Physiolog and Vericis products.

     In addition QTN will market the electronic medical records products of Camtronics through its specialized sales force in the primary care market. The Company allocated the purchase price of $1,750 to the acquired assets, which included $250 to inventory and $1,500 to the customer list, based on their relative fair value. The customer list is being amortized over its estimated useful life of four years.

6. Investments in and advances to affiliated companies:

     During the third quarter of fiscal year 2004 the Company’s investment in Cedara as a percentage of Cedara’s total shares outstanding decreased from 17.6% to 14.8%, as a result of the Company’s decision not to exercise its preemptive right to maintain its ownership interest of 17.6% at the time Cedara completed an equity offering of common shares. During the third quarter of fiscal year 2004, the Company’s guarantee of certain debt owed by Cedara to its lender was cancelled, along with the security agreement between the Company and Cedara’s lending bank.

     Summarized unaudited results of operations of the Company’s partially-owned unconsolidated affiliates are as follows:

7. Goodwill and Other Intangible Assets:

     As of August 1, 2002, Analogic adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). Under SFAS No. 142, goodwill and certain other intangible assets with indefinite lives are no longer amortized, but instead are reviewed for impairment annually, or more frequently if impairment indicators arise. SFAS No. 142 requires that the Company identify its reporting units and determine the carrying value of each of those reporting units by assigning assets and liabilities, including existing goodwill and intangible assets, to those reporting units. The Company performed its annual goodwill impairment test during the quarter ended October 31, 2003, and determined that goodwill was not impaired. The Company will continue to perform its annual goodwill impairment test during the first quarter of each fiscal year, as well as on an event-driven basis, as required under SFAS No. 142.

     Acquired amortizable intangible assets consist of the following:

     The increase of $1,617 in intangible assets relates primarily to the customer list acquired as part of the acquisition of certain assets from QTN.

     Amortization of acquired intangible assets was $2,393 and $1,505 for the nine months ended April 30, 2004 and 2003, respectively.

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     The estimated future amortization expense of acquired intangible assets in the current fiscal year, and each of the five succeeding fiscal years, is expected to be as follows:

8. Net income per share:

     Basic earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the sum of the weighted average number of common shares outstanding during the period, and, if dilutive, the weighted average number of potential shares of common stock, including unvested restricted stock and the assumed exercise of stock options using the treasury stock method.

     The following table sets forth the computation of basic and diluted earnings per share:

9. Dividends:

     The Company declared dividends of $.08 per common share on March 11. 2004, payable on April 9, 2004 to shareholders of record on March 25, 2004; $.08 per common share on December 8, 2003, payable on January 5, 2004 to shareholders of record on December 22, 2003; and $.08 per common share on October 14, 2003, payable November 11, 2003 to shareholders of record on October 28, 2003.

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10. Comprehensive Income:

     The following table presents the calculation of total comprehensive income and its components:

11. Supplemental disclosure of cash flow information:

     Changes in operating assets and liabilities, net of the impact of acquisitions, are as follows:

12. Taxes:

     The effective tax rate for the nine months ended April 30, 2004 was 23% as compared to 36% for the same period last year. The decrease of 13% was primarily due to a relative increase in the estimated benefits from tax exempt interest, extraterritorial income and research and development credits as a result of a lower dollar base of pre-tax income for fiscal 2004 when compared to the same period for fiscal 2003.

13. Segment information:

     The Company operates in three reporting segments. The two primary reporting segments conduct business within the electronics industry: Imaging Technology Products and Signal Processing Technology Products. Imaging Technology Products consist primarily of electronic systems and subsystems for medical imaging equipment and advanced explosive detection systems. Signal Processing Technology Products consist of Analog to Digital (A/D) converters and supporting modules, and high-speed digital signal processors. The Company’s Corporate and Other segment represents the Company’s hotel business and net interest income. Assets of Corporate and Other consist

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primarily of the Company’s cash equivalents, marketable securities, fixed and other assets, which are not specifically identifiable. The table below presents information about the Company’s reportable segments:

14. Commitments and guarantees:

     The Company’s standard original equipment manufacturing and supply agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any United States patent, or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes that its estimated exposure on these agreements is currently minimal. Accordingly, the Company has no liabilities recorded for these agreements as of April 30, 2004.

     Generally, the Company warrants that its products will perform, in all material respects, in accordance with its standard published specification in effect at the time of delivery of the products to the customer for a period ranging from 12 to 24 months from the date of delivery. The Company provides for the estimated cost of product and service warranties based on specific warranty claims, claims history and engineering estimates, where applicable.

     The following table presents the Company’s product warranty liability for the reporting periods:

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15. New accounting pronouncements

     In January 2003, the Financial Accounting Standards Board issued Financial Accounting Standards Board Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities”, and amended it by issuing FIN 46R in December 2003.” FIN 46R requires that if an entity has a controlling financial interest in a variable interest entity, the assets, liabilities and results of activities of the variable interest entity should be included in the consolidated financial statements of the entity. FIN 46 is effective immediately for all new variable interest entities created or acquired after January 31, 2003. The Company did not create or acquire any variable interest entities after this date. Because the Company does not have any variable interest entities, the adoption of the provisions of FIN 46R in the third quarter of fiscal 2004 did not have any effect on its financial position or results of operations.

16. Subsequent events:

     On June 10, 2004, the Company announced that its Board of Directors, on June 8, 2004, declared dividends of $0.08 per common share payable on July 6, 2004 to shareholders of record on June 22, 2004.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     All dollar amounts in this Item 2 are in thousands except per share data.

     The following information has been amended to reflect the revisions made to the Condensed Consolidated Financial Statements as further discussed in Note 2, “Restatement.” This information should be read in conjunction with the information contained in the Unaudited Condensed Consolidated Financial Statements, and Notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q/A.

Summary

     The following is a summary of the areas that management believes are important in understanding the results of the periods indicated. This summary is not a substitute for the detail provided in the following pages or for the unaudited condensed consolidated financial statements and notes that appear elsewhere in this document.

     Net sales for the nine months ended April 30, 2004 were $136,719 lower than the same period last year. The net sales for the three months ended April 30, 2004 were $11,865 lower than the same period last year. The sales decrease for these periods was, as expected, primarily the result of a reduction of the number of EXACT systems and related spare parts sold to L-3 Communications. The short fall in the EXACT systems and spare parts sales was partially offset during the nine months ended April 30, 2004 by higher demand for ultrasound, data acquisition systems, high-speed computer products, fetal monitor products, the recognition of the prior years’ Camtronics deferred revenue of $8,700, the sale of a license of intellectual property for $1,750 to an affiliated party, and revenue of $2,500 resulting from a multi-year, multi-million dollar Original Equipment Manufacturer’s (“OEM”) agreement, in which a level of margin based on a certain amount of revenue per year is guaranteed annually for the next three years.