The move is aimed at aligning “research and development investment with expected customer funding” in Analogic’s security & detection business and a voluntary retirement program, the company said.
“As we grow our business and continue to focus on improving our profitability, we are restructuring our global manufacturing and realigning our R&D investment with market opportunities. The restructuring includes a voluntary retirement program to minimize the impact on our employees. With our Shanghai facility fully operational, leveraging this low-cost manufacturing capability will give us a key competitive advantage. In addition, we are aligning our R&D investment with expected customer funding levels in our security & detection business,” president & CEO Jim Green said in prepared remarks.
Analogic said it expects the cuts to be complete by the end of fiscal 2016, a year from now, incurring charges of roughly $6 million during the fiscal year. Annual pre-tax savings are forecast to be about $4 million in fiscal ’16 and $9 million a year later.
The company also reported lower profits for its fiscal 2015 4th quarter and full year, but still managed to top expectations on Wall Street.
Analogic posted profits of $10.9 million, or 86¢ per share, on sales of $154.5 million for the 3 months ended July 31, for a bottom-line slide of -2.5% on sales growth of 8.8%. Adjusted to exclude 1-time items, earnings per share were $1.28, 4¢ ahead of The Street, where analysts were looking for sales of $150.5 million.
Full-year profits were down -2.9% to $33.5 million, or $2.66 per share, on sales growth of 4.2% to $531.2 million.
“We achieved our stated financial goals for fiscal 2015 with revenue growth of 4% (6% on constant currency) and non-GAAP operating margins improving 1 point (2 points on constant currency) even in a challenging international economic environment. I am especially pleased to report that the performance in our ultrasound segment has improved substantially as we continue to establish our market presence in the U.S. for procedure guided ultrasound for urology, surgery and point-of-care. Also medical imaging and security & detection met our expectations for the year as we continue to introduce new products and advanced imaging technologies,” Green said. “In fiscal 2016 we expect continued mid-single-digit revenue growth and, combined with our focus on costs, should continue driving improvement in non-GAAP operating margin expansion of approximately 1 point.”
A year ago Analogic announced across-the-board cuts totaling 50 positions, mainly in its engineering departments.
ALOG shares closed up 0.2% yesterday at $83.60 apiece.