Analogic faces $15m bribery settlement, misses on Q1 earnings but shares stay strong

Analogic (NSDQ:ALOG) said yesterday it may face a $15 million settlement with the U.S. gov’t over a foreign corruption investigation, and released  1st quarter 2016 earnings that missed on forecasted EPS and rev, but saw shares stay strong.

The Peabody, Mass.-based company said the SEC rejected a $1.6 million settlement it made in September over an investigation from 2011 involving its subsidiary BK Medical, and it could now face up to $15 million in combined payments from the Department of Justice and SEC.

That figure doesn’t take into account any sanctions or penalties that could be imposed by the Danish government, the company said in an SEC filing, though it suggested that under Danish law, any penalties imposed would take into account the amount the company paid to the DOJ and SEC.

Analogic said there were no assurances that it would settle for that amount with the SEC, DOJ and Danish Government, and that the cost of the settlement could “exceed our accruals.”

In October, 2011, Analogic said it turned up evidence that could reveal a bribery scheme during its fiscal 4th 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.

Analogic voluntarily disclosed the possible issues to the SEC, DOJ and Danish gov’t, and said in a recent SEC filing that it “terminated the employment of certain BK Medical employees and also terminated our relationships with the BK Medical distributors that were involved in the transactions.”

The company also disclosed its 1st quarter 2016 earnings, which slumped from last year’s numbers and missed analyst expectations across the board, but saw shares stay steady.

Analogic reported profits of $1.4 million, or 11¢ per share, on sales of $114.9 million for the 3 months ended October 31. That amounts to a 62.3% bottom line slide as sales shrunk 2.8% compared with the same period last year.

Adjusted to exclude 1 time items, earnings per share were 55¢, just over half of what Analysts on Wall Street were looking for with estimates of $1.07 for the quarter.

Analogic missed revenue street expectations as well, which forecast $125.2 million for the quarter, over $11m off from what the company brought in.

Yesterday, Analogic opened at $82.75 and saw shares dip as low as 4.2% during trading, but closed down less than 1% at $82.06.

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