Analogic has announced plans to restructure its ultrasound business in the wake of persistent declining revenue in the first six months of its fiscal 2017 (end-January 31). The company said it will close a Canadian facility and consolidate its operations with two other sites.
In a move to improve profitability and overall long-term growth, Analogic will close its Vancouver, British Columbia, ultrasound facility by the end of fiscal 2017 and consolidate those activities with existing operations in Peabody, MA, and Copenhagen.
The actions will mean a workforce reduction of approximately 130 employees, which is expected to generate savings of $12 million to $15 million in fiscal 2018, principally in the ultrasound business.
"As discussed last quarter, we have completed the analysis of our Ultrasound business, and will resize the operating expense structure, consolidate R&D and service, and optimize sales/marketing expense, to match a more focused approach on those areas of the business with long-term growth opportunities," said Fred Parks, Analogic's president and CEO, in a prepared statement.
Revenue in Analogic's ultrasound segment decreased 7% to $40.3 million in the second fiscal quarter, compared with $43.3 million in the same quarter of fiscal 2016. For the six-month period, ultrasound revenue slipped 5% to $76.1 million, compared with $80 million in the same period of fiscal 2016.
Analogic blamed the revenue declines on delays in its general imaging segment, as well as "challenging" revenue in its OEM probe business, which was partially offset by direct sales growth in China and Europe. The restructuring could result in charges of up to $5 million in fiscal 2017, $500,000 of which was recorded in the second quarter. Additional noncash charges in the second half of fiscal 2017 also could occur, as Analogic finalizes its restructuring plan.
The company also plans to resize its U.S. sales and global marketing business, along with general and administrative organizations, as part of the restructuring and a renewed focus on its core markets of urology and surgery, as well as specific areas of the point-of-care market.
Despite problems in its ultrasound business, Analogic increased total revenue by 3% to $131.5 million in the second quarter, compared with $127.9 million in the same quarter of fiscal 2016. The company posted net income of $7.5 million, compared with a net loss of $3 million in the prior year's quarter.
For the six-month period, total revenue rose 4% to $252.6 million, compared with $242.8 million in the first half of fiscal 2016. Six-month net income totaled $10 million, compared with a net loss of $1.6 million in the same period of 2016.
![Examples of ultrasound findings and techniques. (A) Images in a 39-year-old male patient with a mass in the left thigh. The mass is heterogeneous on the B-mode US image (compared with the patient in D) and showed increased microvascularity (superb microvascular imaging [SMI]) and shear-wave elastography (SWE) values. Undifferentiated pleomorphic sarcoma was diagnosed at biopsy (with pleomorphic rhabdomyosarcoma in surgical specimen). (B) Images in an 18-year-old male patient with a mass in the left leg. The mass is hypoechoic on the B-mode image, with no other findings suggestive of malignancy. The lesion is in contact with the cortex of the tibia, which is slightly irregular. CT revealed a doubtful anteromedial tibial erosion. The microvascular study demonstrated high vascularization, suggestive of malignancy. Periosteal Ewing sarcoma was diagnosed with both histologic and immunohistochemical confirmation. (C) Images in a 69-year-old female patient with a lump growing on the outside of the left leg. Multiple SWE examinations were performed (please note the high values obtained in the measurements, whereas the color map highlights the stiffness relative to adjacent tissues). SMI showed areas of increased vascularization to target for sampling. Undifferentiated spindle cell sarcoma was diagnosed at biopsy, with residual leiomyosarcoma in the surgical specimen after neoadjuvant therapy. (D) Images in a 56-year-old female patient with a mass in the right thigh. The mass is heterogeneous at both B-mode ultrasound (similar to patient A) and MRI (coronal T2-weighted spectral attenuated inversion recovery [SPAIR]; T1-weighted pre-contrast and postcontrast imaging), which even shows uptake after the administration of paramagnetic contrast material, which is traditionally suggestive of malignancy. Low values at SMI and elastography are suggestive of benignity. Spindle cell lipoma was diagnosed at biopsy, with atypical spindle cell lipomatous tumor in the surgical specimen.](https://img.auntminnie.com/mindful/smg/workspaces/default/uploads/2026/08/images-radiol250278fig2.APCFLSvX6p.jpg?auto=format%2Ccompress&dpr=2&fit=crop&h=167&q=70&w=250)
