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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

Commission File Number 0-6715

Analogic Corporation

(978) 977-3000

          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 December 31, 2004 was 13,688,954.

ANALOGIC CORPORATION

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Introductory note:

      The Company is restating its financial statements for the quarterly period ended October 31, 2003 (the “Restatement”). All financial information reported for that quarterly period in this Quarterly Report on Form 10-Q reflects the Restatement. Please see Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements for more information regarding the Restatement.

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PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

ANALOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

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

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ANALOGIC CORPORATION

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

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

      Analogic Corporation (“the Company”) is restating its Consolidated Financial Statements for fiscal 2002 and 2003 and for each of the first three quarters of fiscal 2004, to reflect the application of the appropriate accounting principles to (1) the recognition of software revenue and related costs by its 100% owned U.S. subsidiary Camtronics Medical Systems, Ltd. (“Camtronics”) and (2) the treatment of a license of intellectual property sold to the Company’s affiliate Shenzhen Anke High-Tech Ltd. (“SAHCO”) for each of the first three quarters of fiscal 2004. As restated, the Company’s financial results for the quarter ended October 31, 2003 reflect a reduction in revenues of $3,260, a reduction of net income of $2,232 and a reduction in diluted earnings per share of $0.17, compared to the Company’s financial results previously reported for the quarter ended October 31, 2003.

      Summarized below is a more detailed discussion of the restatement affecting the quarter ended October 31, 2003 along with a comparison of the amounts previously reported in the Condensed Consolidated Statements of Income in the Company’s Form 10-Q for the quarter ended October 31, 2003.

     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 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

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 or VSOE of fair value for those elements cannot be determined.

      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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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The following tables show the effect of the restatement on the Company’s Statement of Income for the quarter ended October 31, 2003: