UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Amendment No. 2 on

R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the period ended October 31, 2002

or

£ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the transition period from            to

Commission file number 0-6715

Analogic Corporation

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

(Former name, former address and former fiscal year, if changed since last report.)

     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.

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

     The number of shares of Common Stock outstanding at December 5, 2002 was 13,291,098.

ANALOGIC CORPORATION

QUARTERLY REPORT ON FORM 10-Q/A
FOR THE QUARTER ENDED OCTOBER 31, 2002
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. 2 on Form 10-Q/A to the Quarterly Report on Form 10-Q of Analogic Corporation (the “Company”) for the quarter ended October 31, 2002 is being filed to (i) restate the Company’s Condensed Consolidated Financial Statements (Unaudited) for the quarters ended October 31, 2002 and 2001, and (ii) revise related disclosures included in the Quarterly Report on Form 10-Q.

     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 the recognition of software revenue and related costs by Camtronics Medical Systems, Ltd. (“Camtronics”) a wholly owned U.S. subsidiary of the Company. 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. As restated, the Company’s financial results for the quarter ended October 31, 2002 reflect a reduction in revenues of $51 and net income of $23, and no change in basic and diluted earnings per share; and the Company’s financial results for the quarter ended October 31, 2001 reflect a reduction in revenues of $654, net income of $257, and basic and diluted earnings per share of $0.02. See Note 2, “Restatement,” of the Notes to Unaudited Condensed Consolidated Financial Statements for a more complete discussion of the restatement.

     This Amendment No. 2 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 October 31, 2002. This Amendment No. 2 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
INDEX

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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 financial statements.

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ANALOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

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

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ANALOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

The accompanying notes are an integral part of these unaudited condensed 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 months ended October 31, 2002 are not necessarily indicative of the results to be expected for the fiscal year ending July 31, 2003, 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, 2002, included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2004, as filed with the SEC on February 1, 2005.

     The condensed financial statements have not been audited by independent certified public accountants. The condensed consolidated balance sheet as of July 31, 2002, contains data derived from audited financial statements.

     Certain financial statement items 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 included in those fiscal years to reflect the application of the appropriate accounting principles to the recognition of software revenue and related costs by its 100% owned U.S. subsidiary Camtronics Medical Systems, Ltd. (“Camtronics”). As restated, the Company’s financial results for the quarter ended October 31, 2002 reflect a reduction in revenues of $51 and net income of $23, and no change in basic and diluted earning per share; and the Company’s financial results for the quarter ended October 31, 2001 reflect a reduction in revenues of $654, net income of $257, and basic and diluted earnings per share of $0.02, in each case as compared to the Company’s financial results previously reported for the quarters ended October 31, 2002 and 2001. 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 quarters ended October 31, 2002 and 2001and a comparison of the amounts previously reported in the unaudited condensed balance sheets and statements of operations in the Company’s Quarterly Report on Form 10-Q for the quarters ended October 31, 2002 and 2001. The Company reclassified certain intangibles and goodwill balances related to the Company’s ownership of Cedara Software Corporation (“Cedara”) to investment in and advances to affiliated companies in the unaudited condensed consolidated balance sheets, and reclassified in the unaudited condensed consolidated statements of operations the amortization of intangible assets related to Cedara from general and administrative expense to equity in unconsolidated affiliates.

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.

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     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 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.

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     The following tables show the effect of the restatement 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 the current period restatement for deferral of revenue and related costs, and (2) the cumulative effect at the beginning of the quarter for the restatements of prior periods for similar matters. On a net basis the balance sheet components increased (decreased) due to the following:

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Balance Sheets:

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     The increases (decreases) to the balance sheet components are due to current period recognition of the effect of the current period restatement for deferral of revenue and related costs. On a net basis the balance sheet components increased (decreased) due to the following:

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3. Balance sheet information:

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

4. Business combinations:

     During October 2002, Anrad Corporation, the Company’s wholly owned subsidiary located in Saint-Laurent, Quebec, purchased the remaining 52% of the outstanding common stock of FTNI, Inc. for $2,407 in cash. Anrad’s total investment at October 31, 2002, amounted to approximately $2,746 of which approximately $2,019 was determined to be intellectual property and $727 represented net assets, mainly cash. The intellectual property will be amortized over its estimated useful life of five years. The supplemental pro forma information disclosing the results of operations for the quarters ended October 31, 2002 and 2001 have not been presented as the results are immaterial.

     FTNI was founded by three Canadian companies in April 1997 to develop products for medical and industrial applications. Noranda Advanced Materials, which was one of the FTNI founders with a 48% ownership interest, was acquired by Analogic in 1999 and renamed Anrad. With the acquisition of FTNI, Anrad will have full ownership rights and access to FTNI’s basic technology and intellectual property.

5. Explosive Assessment Computed Tomography (“EXACT”) Systems Agreement:

     The Company announced in April 2002 that it had entered into an agreement to supply up to 1,000 of its EXACT Systems to L-3 Communications’ Security and Detection System division (“L-3”). The EXACT is the core system of L-3’s Examiner 3DX6000 certified Explosive Detection System that is being purchased by the United States Transportation Security Administration (TSA) and installed at major airports across the United States.

     The Company recognizes product revenue upon shipment of EXACT systems and spare parts to L-3, at which time all revenue recognition criteria have been met. During the first quarter of fiscal 2003, the Company received firm orders from L-3 for 245 additional systems. These orders brought the total number of systems that had been ordered by L-3 for delivery to the TSA to 425. As of October 31, 2002, the Company has shipped 229 completed units and certain spare parts related to the contract. The Company expects to be able to ship the remaining EXACT systems by December 31, 2002.

     The Company recorded cash received from L-3 for the purchase of long-lead-time inventory components as advance payments and deferred revenue within the liabilities section of the balance sheet. These payments are not recognized as revenue until the systems to which the inventory components relate to have been shipped. As of

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October 31, 2002, the Company had a remaining balance of $31,950 recorded within advance payments related to long-lead purchases.

     The agreement also provided for the Company to receive $22,000 of ramp-up funds for the purpose of leasing and fitting up a facility and ensuring the availability of key critical raw material and inventory components from suppliers to meet the production and volume requirements of this contract. These costs incurred and assets purchased are fully reimbursed by L-3. The Company has not recorded any revenues, costs or assets related to these ramp-up funds.

     All cash received for ramp-up activities is recorded within advance payments and deferred revenue within the liability section of the balance sheet and reduced as the cash is spent on these activities.

     In addition to the $22,000 of ramp-up funds provided by L-3 on behalf of the TSA, the Company has spent approximately $5,700 for manufacturing and office equipment which was capitalized during the quarter ended October 31, 2002.

     As of October 31, 2002, the Company had a balance of $9,602 of unexpended funds recorded within advance payments and deferred revenue related to ramp-up funds.

6. Dividends:

     The Company declared dividends of $.08 per common share on October 15, 2002, payable November 12, 2002 to shareholders of record on October 29, 2002.

7. Goodwill and Other Intangible Assets:

     As of August 1, 2002, Analogic adopted Statement of Financial Accounting Standards (“SFAS”) 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.

     In connection with the adoption of SFAS No. 142, Analogic was required to perform a transitional impairment assessment of goodwill within six months of adoption of this standard. SFAS No. 142 requires that Analogic 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. Analogic has assigned the entire balance of goodwill to Imaging technology products for the purpose of performing the transitional impairment test. Analogic completed its transitional impairment assessment of goodwill during the first quarter of 2003, and determined that goodwill was not impaired.

     The following table reflects the unaudited net income as adjusted of Analogic, giving effect to SFAS No. 142 as if it were adopted on August 1, 2001:

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     Intangible assets, classified in other assets, consist of the following:

     The remaining amortization expense of intangible assets is expected to be as follows:

8. Comprehensive Income (Loss):

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

9. Net income (loss) per share:

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

     Options to purchase 264 and 101 shares of common stock were outstanding as of October 31, 2002 and 2001, respectively, but were not included in the computation of diluted earnings per share because the exercise prices of the options were greater than the average market price of Analogic’s common stock during the three months ended October 31, 2002 and 2001.

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10. Supplemental disclosure of cash flow information:

     Changes in operating assets and liabilities are as follows:

11. Segment information:

     The Company operates primarily within two segments within the electronics industry: Imaging Technology Products (consisting of medical and security imaging 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 A/D converters and supporting modules, and high-speed digital signal processors. The Company’s Corporate and other represents the Company’s hotel business and net interest income. Assets of Corporate and other consist primarily of the Company’s cash equivalents, marketable securities, fixed and other assets, not specifically identifiable.

     The table below presents information about the Company’s reportable segments: