Analogic Corp (NASDAQ:ALOG) Q2 2016 Earnings Conference Call - Final Transcript

Mar 02, 2016 • 05:00 pm ET

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Analogic Corp (NASDAQ:ALOG) Q2 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon and welcome to the Analogic Corporation's Second Quarter Conference Call for Fiscal 2016.

The following corporate officers are present. Mr. Jim Green, President and CEO; Mr. Mark Frost, Senior Vice President, CFO and Treasurer; and Mr. John Fry, Senior Vice President, General Counsel.

I would like to remind everyone that a supplementary presentation will be used during today's call. If you have not already downloaded that presentation, you can do so at any time at investor.analogic.com. That presentation will remain available until April 3, 2016.

Now, I would like to turn the call over to Mr. Mark Namaroff, Head of Investor Relations.

Executive
Mark Namaroff

Good afternoon, everyone, and welcome to Analogic's second quarter conference call for fiscal 2016. Earlier today, after the market closed, we issued a press release describing our financial results for our second fiscal quarter. If you have not yet downloaded the press release, you can do so via our website at investor.analogic.com.

Before we review the quarter, I would like to remind everyone that today's call may include forward-looking statements such as comments about our plans, expectations and projections. For more information on risks and other factors that could cause our actual results to differ significantly from our forward-looking statements, please refer to our most recent Form 10-K and 10-Q reports on file with the SEC.

Also on today's call, we will be discussing certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. We believe that using non-GAAP metrics provide investors a more thorough understanding of our business. An explanation and a reconciliation of our non-GAAP financial measures are provided at the end of the presentation materials and in our second quarter press release.

And now, I would like to turn the call over to Jim Green.

Executive
James Green

Thanks, Mark. Good afternoon, everybody. Let's move to Slide 4 of the presentation, please. You can see that our overall strengthening mix drove a very profitable quarter, in spite of significant challenges in the security and detection market.

Revenue came in $128 million, that's down 5% from last year and down 4% on a constant currency basis. Gross margin was 46%, that's up 3 points from last year and includes a currency impact of half a point. Non-GAAP operating margin was a strong 15%, up 2 points. And non-GAAP earnings per share was $1.18, that's up $0.10 from last year.

Our GAAP EPS was negative $0.24, down $1.02 and it includes a $13.3 million charge in connection with the BK Medical inquiry. We are moving closer to a resolution in this matter and of course we look forward to putting it behind us. And also there is a $3.1 million accrual which is about $0.25 in the previously announced restructuring.

Moving on to Slide 5, we will take a look at the segment highlights. Medical imaging revenue was flat versus prior year. CT subsystems saw some softness on timing of shipments in the quarter. We saw an improving mix on our growing movement toward private