Analogic Corp. (NYSE:ALOG) said it’s probing whether its BK Medical subsidiary took part in a bribery scheme involving Danish distributors.
The Peabody, Mass.-based imaging device maker said it turned up evidence during its fiscal fourth quarter of payments from distributors to BK Medical "with respect to which we have raised questions concerning compliance with law, including Danish law and the United States Foreign Corrupt Practices Act, and our business policies," according to a regulatory filing.
"These have included transactions in which the distributors paid BK Medical amounts in excess of amounts owed and BK Medical transferred the excess amounts, at the direction of the distributors, to third parties identified by the distributors. We have been unable to ascertain with certainty the ultimate beneficiaries or the purpose of these transfers," according to the filing. "We have terminated the employment of certain BK Medical employees that were involved in the transactions. We have decided to wind down our relationship with certain of the BK Medical distributors, and are evaluating our relationship with certain other of the BK Medical distributors, that were involved in the transactions.”
Analogic said it voluntarily disclosed the possible lawbreaking to the Danish government, the U.S. Justice Dept. and the federal Securities & Exchange Commission, but is unsure of the impact the disclosures could have on its business.
"Revenue from sales to the BK Medical distributors with whom we have decided to wind down our relationship represented less than 1% of our total fiscal year 2011 revenue. Revenue from sales to the BK Medical distributors that were involved in the identified transactions, including those distributors with whom we have decided to wind down our relationship, represented approximately 1.5% of our total fiscal year 2011 revenue," according to the filing.
Analogic posted profits of $17.8 million, or $1.42 per diluted share, on sales of $473.6 million during the three months ended June 30. That compares with profits of $15.6 million, or $1.23 per diluted share, on sales of $414.8 million during fiscal 2010.