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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







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

For the quarterly period ended January 31, 2009

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

(Exact name
of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Massachusetts                                                  |  | 04-2454372                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|8 Centennial Drive, Peabody, Massachusetts                     |  | 01960                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

(978) 326-4000

(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.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                      |  |                                              |  |                             
|-------------------------- |  | -------------------- |  | -------------------------------------------- |  | ----------------------------
|Large accelerated filer  x |  | Accelerated filer   ̈ |  | Non-accelerated filer   ̈                     |  | Smaller reporting company   ̈
|                           |  |                      |  | (Do not check if a smallerreporting company) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.)    Yes   ̈    No  x

The number of shares of Common Stock outstanding at February 27, 2009 was 12,798,931.









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ANALOGIC CORPORATION

TABLE OF CONTENTS



|                              |  |                                                                                                              |  |         
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|                              |  |                                                                                                              |  | Page No.
|Part I. Financial Information |  |                                                                                                             
|                              |  |                                                                                                             
|Item 1.                       |  | Financial Statements                                                                                         |  |         
|                              |  |                                                                                                             
|                              |  | Unaudited Consolidated Balance Sheets as of January 31, 2009 and July 31, 2008                               |  | 3       
|                              |  |                                                                                                             
|                              |  | Unaudited Consolidated Statements of Operations for the Three and Six Months Ended January 31, 2009 and 2008 |  | 4       
|                              |  |                                                                                                             
|                              |  | Unaudited Consolidated Statements of Cash Flows for the Six Months Ended January 31, 2009 and
2008           |  | 5       
|                              |  |                                                                                                             
|                              |  | Notes to Unaudited Consolidated Financial Statements                                                         |  | 6       
|                              |  |                                                                                                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 22      
|                              |  |                                                                                                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                                                   |  | 32      
|                              |  |                                                                                                             
|Item 4.                       |  | Controls and Procedures                                                                                      |  | 32      
|                              | 
|Part II. Other Information    |  |                                                                                                             
|                              |  |                                                                                                             
|Item 1A.                      |  | Risk Factors                                                                                                 |  | 33      
|                              |  |                                                                                                             
|Item 2.                       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                  |  | 38      
|                              |  |                                                                                                             
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                          |  | 38      
|                              |  |                                                                                                             
|Item 6.                       |  | Exhibits                                                                                                     |  | 39      
|                              | 
|Signatures                    |  | 40                                                                                                          
|                              | 
|Exhibit Index                 |  | 41                                                                                                          



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##### Table of Contents

Part I. FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

ANALOGIC CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except
per share data)



|                                                                                                                                 |  |                 |         |              |   |        
|-------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ------- | ------------ | - | -------
|                                                                                                                                 |  | January 31,2009 |         | July 31,2008
|Assets                                                                                                                           |  |                 |         |              |   |        
|Current assets:                                                                                                                  |  |                 |         |              |   |        
|Cash and cash equivalents                                                                                                        |  | $               | 82,148  |              | $ | 173,912
|Marketable securities, at fair value                                                                                             |  |                 | 65,700  |              |   | 12,530 
|Accounts receivable, net of allowance for doubtful accounts of $671 and $998 at January 31, 2009 and July 31, 2008, respectively |  |                 | 62,126  |              |   | 66,573 
|Inventories                                                                                                                      |  |                 | 81,648  |              |   | 79,197 
|Refundable and deferred income taxes                                                                                             |  |                 | 14,865  |              |   | 17,429 
|Other current assets                                                                                                             |  |                 | 11,555  |              |   | 11,285 
|                                                                                                                                 |  |                 |         |              |   |        
|Total current assets                                                                                                             |  |                 | 318,042 |              |   | 360,926
|                                                                                                                                 |  |                 |         |              |   |        
|Property, plant, and equipment, net                                                                                              |  |                 | 83,383  |              |   | 90,405 
|Capitalized software, net                                                                                                        |  |                 | 4,725   |              |   | 4,422  
|Intangible assets, net                                                                                                           |  |                 | 42,242  |              |   | 44,574 
|Goodwill                                                                                                                         |  |                 | 2,418   |              |   | 3,534  
|Other assets                                                                                                                     |  |                 | 237     |              |   | 1,396  
|Deferred income tax assets                                                                                                       |  |                 | 6,856   |              |   | 5,908  
|                                                                                                                                 |  |                 |         |              |   |        
|Total Assets                                                                                                                     |  | $               | 457,903 |              | $ | 511,165
|                                                                                                                                 |  |                 |         |              |   |        
|Liabilities and Stockholders Equity                                                                                             |  |                 |         |              |   |        
|Current liabilities:                                                                                                             |  |                 |         |              |   |        
|Accounts payable                                                                                                                 |  | $               | 24,437  |              | $ | 28,329 
|Accrued liabilities                                                                                                              |  |                 | 25,168  |              |   | 34,552 
|Advance payments and deferred revenue                                                                                            |  |                 | 10,943  |              |   | 10,785 
|                                                                                                                                 |  |                 |         |              |   |        
|Total current liabilities                                                                                                        |  |                 | 60,548  |              |   | 73,666 
|                                                                                                                                 |  |                 |         |              |   |        
|Long-term liabilities:                                                                                                           |  |                 |         |              |   |        
|Accrued income taxes                                                                                                             |  |                 | 6,810   |              |   | 7,365  
|Other long-term liabilities                                                                                                      |  |                 | 415     |              |   | 686    
|Deferred income tax liabilities                                                                                                  |  |                 | 348     |              |   | 942    
|                                                                                                                                 |  |                 |         |              |   |        
|Total long-term liabilities                                                                                                      |  |                 | 7,573   |              |   | 8,993  
|                                                                                                                                 |  |                 |         |              |   |        
|Commitments and guarantees (Note 15)                                                                                             |  |                 |         |              |   |        
|Stockholders equity:                                                                                                            |  |                 |         |              |   |        
|Common stock, $.05 par value                                                                                                     |  |                 | 640     |              |   | 672    
|Capital in excess of par value                                                                                                   |  |                 | 69,537  |              |   | 70,593 
|Retained earnings                                                                                                                |  |                 | 316,641 |              |   | 338,669
|Accumulated other comprehensive income                                                                                           |  |                 | 2,964   |              |   | 18,572 
|                                                                                                                                 |  |                 |         |              |   |        
|Total stockholders equity                                                                                                       |  |                 | 389,782 |              |   | 428,506
|                                                                                                                                 |  |                 |         |              |   |        
|Total Liabilities and Stockholders Equity                                                                                       |  | $               | 457,903 |              | $ | 511,165
|                                                                                                                                 |  |                 |         |              |   |        

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



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ANALOGIC CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)



|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|------------------------------------ |  | ----------------------------- | ------- | --------------------------- | ---- | - | ------ |  | - | ------- | - |  | - | -------
|                                     |  | Three Months EndedJanuary 31, |         | Six Months EndedJanuary 31,
|                                     |  | 2009                          |         |                             | 2008 |   | 2009   |  |   | 2008   
|Net revenue:                         |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Product                              |  | $                             | 94,444  |                             |      | $ | 94,231 |  | $ | 189,391 |   |  | $ | 179,542
|Engineering                          |  |                               | 6,208   |                             |      |   | 2,729  |  |   | 9,701   |   |  |   | 8,244  
|Other                                |  |                               | 2,063   |                             |      |   | 2,440  |  |   | 5,175   |   |  |   | 5,815  
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Total net revenue                    |  |                               | 102,715 |                             |      |   | 99,400 |  |   | 204,267 |   |  |   | 193,601
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Cost of sales:                       |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Product                              |  |                               | 61,822  |                             |      |   | 57,175 |  |   | 127,100 |   |  |   | 109,224
|Engineering                          |  |                               | 6,293   |                             |      |   | 3,120  |  |   | 9,483   |   |  |   | 8,576  
|Other                                |  |                               | 1,697   |                             |      |   | 1,765  |  |   | 3,486   |   |  |   | 3,644  
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Total cost of sales                  |  |                               | 69,812  |                             |      |   | 62,060 |  |   | 140,069 |   |  |   | 121,444
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Gross margin                         |  |                               | 32,903  |                             |      |   | 37,340 |  |   | 64,198  |   |  |   | 72,157 
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Operating expenses:                  |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Research and product development     |  |                               | 11,358  |                             |      |   | 11,858 |  |   | 23,925  |   |  |   | 23,040 
|Selling and marketing                |  |                               | 9,728   |                             |      |   | 7,985  |  |   | 19,412  |   |  |   | 15,787 
|General and administrative           |  |                               | 9,836   |                             |      |   | 9,696  |  |   | 20,464  |   |  |   | 19,136 
|Restructuring charge                 |  |                               | 3,488   |                             |      |   |       |  |   | 3,488   |   |  |   |       
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Total operating expenses             |  |                               | 34,410  |                             |      |   | 29,539 |  |   | 67,289  |   |  |   | 57,963 
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Income (loss) from operations        |  |                               | (1,507  | )                           |      |   | 7,801  |  |   | (3,091  | ) |  |   | 14,194 
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Other income:                        |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Interest income, net                 |  |                               | 767     |                             |      |   | 2,484  |  |   | 1,775   |   |  |   | 5,187  
|Other                                |  |                               | 464     |                             |      |   | 421    |  |   | 897     |   |  |   | 860    
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Total other income                   |  |                               | 1,231   |                             |      |   | 2,905  |  |   | 2,672   |   |  |   | 6,047  
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Income (loss) before income taxes    |  |                               | (276    | )                           |      |   | 10,706 |  |   | (419    | ) |  |   | 20,241 
|Provision (benefit) for income taxes |  |                               | (1,695  | )                           |      |   | 3,559  |  |   | (2,158  | ) |  |   | 6,706  
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Net income                           |  | $                             | 1,419   |                             |      | $ | 7,147  |  | $ | 1,739   |   |  | $ | 13,535 
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Net income per share:                |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Basic                                |  | $                             | 0.11    |                             |      | $ | 0.54   |  | $ | 0.13    |   |  | $ | 1.03   
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Diluted                              |  | $                             | 0.11    |                             |      | $ | 0.54   |  | $ | 0.13    |   |  | $ | 1.02   
|                                     |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Weighted-average shares outstanding: |  |                               |         |                             |      |   |        |  |   |         |   |  |   |        
|Basic                                |  |                               | 12,829  |                             |      |   | 13,174 |  |   | 13,030  |   |  |   | 13,133 
|Diluted                              |  |                               | 12,876  |                             |      |   | 13,271 |  |   | 13,125  |   |  |   | 13,245 

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



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ANALOGIC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



|                                                                                            |  |                             |          |   |      |   |         |  
|------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ---- | - | ------- | -
|                                                                                            |  | Six Months EndedJanuary 31, |         
|                                                                                            |  | 2009                        |          |   | 2008 |  
|OPERATING ACTIVITIES:                                                                       |  |                             |          |   |      |   |         |  
|Net income                                                                                  |  | $                           | 1,739    |   |      | $ | 13,535  |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                             |          |   |      |   |         |  
|Provision for (benefit from) deferred income taxes                                          |  |                             | (2,104   | ) |      |   | 3,255   |  
|Depreciation and amortization                                                               |  |                             | 8,907    |   |      |   | 6,576   |  
|Allowance for (recoveries of) doubtful accounts and notes receivable                        |  |                             | 131      |   |      |   | (496    | )
|Gain on sale of other investments                                                           |  |                             |         |   |      |   | (84     | )
|Net gain on sale of property, plant, and equipment                                          |  |                             | (19      | ) |      |   | (20     | )
|Share-based compensation expense                                                            |  |                             | 2,698    |   |      |   | 1,467   |  
|Excess tax provision (benefit) from share-based compensation                                |  |                             | 13       |   |      |   | (189    | )
|Restructuring charge                                                                        |  |                             | 3,488    |   |      |   |        |  
|Net changes in operating assets and liabilities (Note 12)                                   |  |                             | (15,483  | ) |      |   | (4,657  | )
|                                                                                            |  |                             |          |   |      |   |         |  
|NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITES                                         |  |                             | (630     | ) |      |   | 19,387  |  
|                                                                                            |  |                             |          |   |      |   |         |  
|INVESTING ACTIVITIES:                                                                       |  |                             |          |   |      |   |         |  
|Additions to property, plant, and equipment                                                 |  |                             | (6,065   | ) |      |   | (6,365  | )
|Capitalized software development costs                                                      |  |                             | (1,183   | ) |      |   | (1,032  | )
|Purchase of short-term held-to-maturity marketable securities                               |  |                             | (115,957 | ) |      |   | (93,525 | )
|Maturities of short-term held-to-maturity marketable securities                             |  |                             | 62,787   |   |      |   | 37,997  |  
|Maturities of long-term available-for-sale marketable securities                            |  |                             |         |   |      |   | 2,000   |  
|Proceeds from the sale of other investments                                                 |  |                             |         |   |      |   | 84      |  
|Proceeds from the sale of property, plant, and equipment                                    |  |                             | 25       |   |      |   | 104     |  
|Investments in and advances to affiliated companies                                         |  |                             | (2       | ) |      |   |        |  
|                                                                                            |  |                             |          |   |      |   |         |  
|NET CASH USED FOR INVESTING ACTIVITIES                                                      |  |                             | (60,395  | ) |      |   | (60,737 | )
|                                                                                            |  |                             |          |   |      |   |         |  
|FINANCING ACTIVITIES:                                                                       |  |                             |          |   |      |   |         |  
|Issuance of stock pursuant to exercise of stock options and employee stock purchase plan    |  |                             | 136      |   |      |   | 1,734   |  
|Excess tax provision (benefit) from share-based compensation                                |  |                             | (13      | ) |      |   | 189     |  
|Purchase of common stock                                                                    |  |                             | (25,022  | ) |      |   |        |  
|Dividends paid to shareholders                                                              |  |                             | (2,656   | ) |      |   | (2,660  | )
|                                                                                            |  |                             |          |   |      |   |         |  
|NET CASH USED FOR FINANCING ACTIVITIES                                                      |  |                             | (27,555  | ) |      |   | (737    | )
|                                                                                            |  |                             |          |   |      |   |         |  
|EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                     |  |                             | (3,184   | ) |      |   | 525     |  
|                                                                                            |  |                             |          |   |      |   |         |  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                                   |  | $                           | (91,764  | ) |      | $ | (41,562 | )
|                                                                                            |  |                             |          |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                              |  |                             | 173,912  |   |      |   | 226,545 |  
|                                                                                            |  |                             |          |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                                    |  | $                           | 82,148   |   |      | $ | 184,983 |  
|                                                                                            |  |                             |          |   |      |   |         |  
|Supplemental disclosures of cash flow information:                                          |  |                             |          |   |      |   |         |  
|Refunds received (cash paid) for income taxes, net                                          |  | $                           | 4,951    |   |      | $ | (4,181  | )
|Interest paid                                                                               |  |                             |         |   |      |   | (12     | )

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



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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in
thousands, except share and per share data)

1. Basis of presentation:

Company

Analogic Corporation and its subsidiaries (Analogic or the Company)
are engaged primarily in the design, manufacture, and sale of high performance data acquisition and signal processing instruments to Original Equipment Manufacturers (OEMs) for use in advanced health and security systems and subsystems.
One of Analogics subsidiaries sells products under its own name directly to niche clinical ultrasound end-user markets. Analogics top ten customers combined for approximately 68% and 67% of the Companys total product and
engineering revenue for the three months ended January 31, 2009 and 2008, respectively, and 69% and 68% for the six months ended January 31, 2009 and 2008, respectively. Two customers, Philips and Toshiba, also accounted for 16% and 12%,
respectively, of net accounts receivable at January 31, 2009.

The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly owned. Investments in companies in which ownership interests range from 20% to 50% and the Company exercises significant influence over operating and financial policies, are accounted for using
the equity method. Other investments are accounted for using the cost method.

General

The unaudited consolidated financial statements of the Company presented herein have been prepared pursuant to the rules of the United States Securities
and Exchange Commission (the SEC) for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America (GAAP)
for complete financial statements. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. In the opinion of management, the accompanying
unaudited consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary for a fair statement of the results for all interim periods presented. The results of operations for the three and six
months ended January 31, 2009 are not necessarily indicative of the results to be expected for the fiscal year ending July 31, 2009 (fiscal year 2009), or any other interim period. These statements should be read in conjunction
with the consolidated financial statements and notes thereto for the fiscal year ended July 31, 2008 (fiscal year 2008) included in the Companys Annual Report on Form 10-K as filed with the SEC on September 29, 2008. The
accompanying Consolidated Balance Sheet as of July 31, 2008 contains data derived from audited financial statements.

2. Recent accounting
pronouncements:

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value
Measurements, on August 1, 2008. SFAS No. 157 defines fair value, establishes a methodology for measuring fair value and expands the required disclosure for fair value measurements. During calendar year 2008, the Financial
Accounting Standards Board (FASB) issued the following amendments to SFAS No. 157:



| |  |  | FASB Staff Position (FSP) No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13, amends SFAS No. 157 to remove certain leasing transactions from its scope.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, delays the effective date of SFAS No. 157 from fiscal year 2008 to the
fiscal year ending July 31, 2010 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company is
currently evaluating the potential impact of SFAS No. 157 for non-financial assets and non-financial liabilities on its financial position and results of operations.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, clarifies the application
of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP No. FAS 157-3 was
effective upon issuance on October 10, 2008, including for prior periods for which financial statements have not been issued.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The Company adopted FSP No. FAS 157-1 and FSP No. FAS 157-3 in the first quarter of fiscal year 2009 concurrent with
the adoption of SFAS No. 157. The adoption of SFAS No. 157, as amended, did not have an impact on the Companys financial position or results of operations. See Note 4 for additional SFAS No. 157 disclosures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-including an amendment
of SFAS No. 115. The new statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company
elects the fair value option for an eligible item, changes in that items fair value in subsequent reporting periods must be recognized in current earnings. The Company adopted SFAS No. 159 on August 1, 2008 concurrent with its
adoption of SFAS No. 157. The adoption of SFAS No. 159 did not have an impact on the Companys financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations. SFAS No. 141(R) requires the acquiring entity in a business combination to record all assets acquired and
liabilities assumed at their respective acquisition date fair values, changes the recognition of assets acquired and liabilities assumed arising from contingencies, changes the recognition and measurement of contingent consideration, and requires
the expensing of acquisition-related costs as incurred. SFAS No. 141(R) also requires additional disclosure of information surrounding a business combination, such that users of the entitys financial statements can fully understand the
nature and financial impact of the business combination. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after
December 15, 2008, which will be the Companys fiscal year ending July 31, 2010. An entity may not apply it before that date. The provisions of SFAS No. 141(R) will only impact the Company if the Company is a party to a business
combination after July 31, 2009.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of Accounting Research Bulletin No. 51. SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the
parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS No. 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective for the Company
beginning on August 1, 2009. The Company is currently evaluating the potential impact of the adoption of SFAS No. 160 on its consolidated financial position, results of operations, and cash flows.

In April 2008, the FASB issued FSP No. FAS 142-3, Determining the Useful Life of Intangible Assets. FSP No. FAS 142-3 amends the
factors an entity should consider in developing renewal or extension assumptions used in determining the useful lives of recognized intangible assets. FSP No. FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The
Company does not believe the adoption of FSP No. FAS 142-3 will have a material impact on its consolidated results of operations, financial position, or cash flows.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles, which will provide a framework for selecting accounting principles to be used in
preparing financial statements that are presented in conformity with GAAP for nongovernmental entities. Prior to the issuance of SFAS No. 162, the GAAP hierarchy was defined in the American Institute of Certified Public Accountants
(AICPA) Statement on Auditing Standards No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. With the issuance of SFAS No. 162, the GAAP hierarchy for nongovernmental
entities will move from auditing literature to accounting literature. SFAS No. 162 became effective 60 days following the SECs approval on September 16, 2008 of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. This statement became effective during the second quarter of fiscal year 2009 and did not have an impact on the
Companys financial position or results of operations.



7



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted
in Share-Based Payment Transactions Are Participating Securities, which classifies unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating
securities and requires them to be included in the computation of earnings per share pursuant to the two-class method described in SFAS No. 128, Earnings per Share. This FSP is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period earnings per share data presented are to be adjusted retrospectively (including interim financial statements, summaries of earnings, and
selected financial data) to conform with the provisions of this FSP, with early application not permitted. The Company is currently evaluating the effect, if any, that the adoption of FSP No. EITF 03-6-1 will have on its financial position,
results of operations and cash flows.

3. Share-based payment:

The Company accounts for share-based compensation expense in accordance with SFAS No. 123(R), Share-Based Payment, which establishes accounting for equity instruments exchanged for
employee and director services. Under the provisions of SFAS No. 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the employees or
directors requisite service period (generally the vesting period of the equity grant).

The following table presents share-based
compensation expenses included in the Companys unaudited Consolidated Statements of Operations:



|                                            |  |                               |       |                             |   |       |  |      |       |  |   |      
|------------------------------------------- |  | ----------------------------- | ----- | --------------------------- | - | ----- |  | ---- | ----- |  | - | -----
|                                            |  | Three Months EndedJanuary 31, |       | Six Months EndedJanuary 31,
|                                            |  | 2009                          |       | 2008                        |   | 2009  |  | 2008
|Cost of product sales                       |  | $                             | 64    |                             | $ | 67    |  | $    | 145   |  | $ | 95   
|Research and product development            |  |                               | 228   |                             |   | 188   |  |      | 595   |  |   | 281  
|Selling and marketing                       |  |                               | 121   |                             |   | 44    |  |      | 295   |  |   |     
|General and administrative                  |  |                               | 623   |                             |   | 770   |  |      | 1,663 |  |   | 1,091
|                                            |  |                               |       |                             |   |       |  |      |       |  |   |      
|Share-based compensation expense before tax |  |                               | 1,036 |                             |   | 1,069 |  |      | 2,698 |  |   | 1,467
|Income tax effect                           |  |                               | 152   |                             |   | 240   |  |      | 620   |  |   | 362  
|                                            |  |                               |       |                             |   |       |  |      |       |  |   |      
|Net share-based compensation expense        |  | $                             | 884   |                             | $ | 829   |  | $    | 2,078 |  | $ | 1,105
|                                            |  |                               |       |                             |   |       |  |      |       |  |   |      

Beginning in fiscal year 2008, the Companys Compensation Committee (the
Committee) began granting performance contingent restricted stock awards. From August 1, 2007 through January 31, 2009, the Committee granted awards for a target of 143,248 performance contingent restricted stock shares
(performance awards) under the Companys 2007 Restricted Stock Plan, of which 2,744 shares have been forfeited. These shares will vest if specific pre-established levels of performance are achieved at the end of a three-year
performance cycle, which is July 31, 2010 for 97,572 shares granted in fiscal year 2008 and July 31, 2011 for 42,932 shares granted in fiscal year 2009. The performance goal for the performance awards is based solely on the cumulative
growth of an adjusted earnings per share metric. The actual number of shares to be issued will be determined at the end of each three-year performance cycle and can range from zero to, in most cases, 200% of the target award, or up to 273,869
shares. The actual number of shares to be issued will also include the payment of dividends on the actual number of shares earned. The maximum compensation expense for the performance awards is $16,348 based on a weighted-average grant date fair
value of $59.70 per share. Compensation expense is being recognized over the performance period based on the number of shares that is deemed to be probable of vesting at the end of each three-year performance cycle. As of January 31, 2009, the
Company estimated that total awards covering 48,278 shares with a value of $2,855 were deemed probable of vesting out of total awards covering 140,504 outstanding shares. During the three months ended January 31, 2009 and 2008, compensation
expense of $0 and $196, respectively, was recognized for the performance awards based on the amount of shares deemed probable of vesting. During the six months ended January 31, 2009 and 2008, compensation expense of $420 and $196,
respectively, was recognized for the performance awards based on the amount of shares deemed probable of vesting.



8



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key
input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Companys Common Stock over the options expected term, and the risk-free
interest rate over the options expected term, and the Companys expected annual dividend yield. The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in
calculating the fair values of the Companys outstanding stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity-based awards.

The weighted-average grant-date fair values of options granted were $11.83 and $19.71 per share during the three months ended January 31, 2009 and
2008, respectively, and $19.70 and $21.58 per share during the six months ended January 31, 2009 and 2008, respectively. The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model with the following
assumptions:



|                               |  |                               |   |  |                             |   |  |           |   |  |           |  
|------------------------------ |  | ----------------------------- | - |  | --------------------------- | - |  | --------- | - |  | --------- | -
|                               |  | Three Months EndedJanuary 31, |   |  | Six Months EndedJanuary 31, |  
|                               |  | 2009                          |   |  | 2008                        |   |  | 2009      |   |  | 2008      |  
|Expected option term (1)       |  | 4.7 years                     |   |  | 4.7 years                   |   |  | 4.7 years |   |  | 4.7 years |  
|Expected volatility factor (2) |  | 34                            | % |  | 31                          | % |  | 34        | % |  | 31        | %
|Risk-free interest rate (3)    |  | 3.04                          | % |  | 4.71                        | % |  | 3.04      | % |  | 4.71      | %
|Expected annual dividend yield |  | 0.6                           | % |  | 0.6                         | % |  | 0.6       | % |  | 0.6       | %



|(1) | The option life was determined by estimating the expected option life using historical data.
|--- | --------------------------------------------------------------------------------------------



|(2) | The stock volatility for each grant is determined based on the review of the weighted average of historical daily price changes of the Companys Common Stock over the most
recent five years, which approximates the expected option life of the grant.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The risk-free interest rate for periods equal to the expected term of the share option is based on the U.S. Treasury yield curve in effect at the time of grant.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

The weighted-average fair values of the options granted under the employee stock purchase plan was $5.80 per share for each
of the three and six months ended January 31, 2009 and $15.13 per share during each of the three and six months ended January 31, 2008. The fair value of options at date of grant was estimated using the Black-Scholes option-pricing model
with the following assumptions:



|                               |  |                                       |   |  |           |  
|------------------------------ |  | ------------------------------------- | - |  | --------- | -
|                               |  | Three and Six Months EndedJanuary 31, |  
|                               |  | 2009                                  |   |  | 2008      |  
|Expected option term           |  | 0.5 years                             |   |  | 0.5 years |  
|Expected volatility factor     |  | 50                                    | % |  | 24        | %
|Risk-free interest rate        |  | 1.45                                  | % |  | 5.02      | %
|Expected annual dividend yield |  | 1.5                                   | % |  | 0.5       | %



9



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The following table sets forth the stock option and restricted stock transactions from July 31,
2008 to January 31, 2009:



|                                                           |  |                           |   |                                    |                              |                                           |                                                |      |                         |   |                 |  |         |                                     |  |                 |       |  |                                     |   |  |   |      
|---------------------------------------------------------- |  | ------------------------- | - | ---------------------------------- | ---------------------------- | ----------------------------------------- | ---------------------------------------------- | ---- | ----------------------- | - | --------------- |  | ------- | ----------------------------------- |  | --------------- | ----- |  | ----------------------------------- | - |  | - | -----
|                                                           |  | Stock Options Outstanding |   | Time-BasedUnvested RestrictedStock |                              | Performance-BasedUnvested RestrictedStock
|                                                           |  | Numberof Shares           |   |                                    | WeightedAverageExercisePrice |                                           | WeightedAverageRemainingContractualTerm(years) |      | AggregateIntrinsicValue |   | Numberof Shares |  |         | WeightedAverageGrant DateFair Value |  | Numberof Shares |       |  | WeightedAverageGrant DateFair Value
|Outstanding at July 31, 2008                               |  | 286,868                   |   |                                    | $                            | 51.47                                     |                                                | 4.29 |                         | $ | 6,238           |  | 105,112 |                                     |  | $               | 55.71 |  | 98,072                              |   |  | $ | 59.13
|Granted                                                    |  | 134,153                   |   |                                    |                              | 61.24                                     |                                                |      |                         |   |                 |  | 46,864  |                                     |  |                 | 61.06 |  | 43,065                              |   |  |   | 60.93
|Exercised                                                  |  | (4,475                    | ) |                                    |                              | 44.26                                     |                                                |      |                         |   |                 |  |        |                                     |  |                 | 0.00  |  |                                    |   |  |   |     
|Vesting of restricted stock                                |  |                          |   |                                    |                              |                                           |                                                |      |                         |   |                 |  | (18,618 | )                                   |  |                 | 46.99 |  |                                    |   |  |   |     
|Cancelled (forfeited and expired)                          |  | (9,750                    | ) |                                    |                              | 44.27                                     |                                                |      |                         |   |                 |  | (9,054  | )                                   |  |                 | 65.03 |  | (633                                | ) |  |   | 56.30
|                                                           |  |                           |   |                                    |                              |                                           |                                                |      |                         |   |                 |  |         |                                     |  |                 |       |  |                                     |   |  |   |      
|Outstanding at January 31, 2009                            |  | 406,796                   |   |                                    |                              | 54.95                                     |                                                | 4.86 |                         | $ |                |  | 124,304 |                                     |  |                 | 58.35 |  | 140,504                             |   |  |   | 59.70
|Options vested or expected to vest at January 31, 2009 (1) |  | 369,647                   |   |                                    |                              | 54.23                                     |                                                | 4.71 |                         |   |                |  |         |                                     |  |                 |       |  |                                     |   |  |   |      
|Options exercisable at January 31, 2009                    |  | 162,673                   |   |                                    |                              | 45.50                                     |                                                | 2.64 |                         |   |                |  |         |                                     |  |                 |       |  |                                     |   |  |   |      



|(1) | In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an
estimated forfeiture rate to the unvested options.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4. Marketable securities and fair value:

Effective August 1, 2008, the Company adopted SFAS No. 157 for its financial assets and liabilities that are re-measured at fair value at each
reporting period. In February 2008, the FASB issued FSP No. FAS 157-2, which provides a one-year deferral of the effective date of SFAS No. 157 for non-financial assets and non-financial liabilities, except those that are recognized or
disclosed in the financial statements at fair value at least annually. The adoption of SFAS No. 157 with respect to financial assets and liabilities and non-financial assets and liabilities that are measured at fair value at least annually did
not have an impact on the financial position or results of operations of the Company. SFAS No. 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and requires enhanced
disclosures about fair value measurements. Fair value is defined under SFAS No. 157 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under SFAS No. 157 must maximize the use of observable inputs and minimize the use of unobservable
inputs. SFAS No. 157 describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:



| |  |  | Level 1  Quoted prices in active markets for identical assets or liabilities.
| | - |  | ------------------------------------------------------------------------------



| |  |  | Level 2  Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The Companys cash equivalents and marketable securities are comprised primarily of certificates
of deposits and U.S. government and agency discount notes. In accordance with SFAS No. 157, the following table represents the Companys fair value hierarchy for its financial assets measured at fair value as January 31, 2009:



|                                                        |  |         |       |         |   |         |  |       |   |  |   |      
|------------------------------------------------------- |  | ------- | ----- | ------- | - | ------- |  | ----- | - |  | - | -----
|                                                        |  | Level 1 |       | Level 2 |   | Level 3 |  | Total
|Assets                                                  |  |         |       |         |   |         |  |       |   |  |   |      
|Money market fund included in cash and cash equivalents |  | $       | 1,044 |         | $ |        |  | $     |  |  | $ | 1,044

The Company did not have any financial liabilities measured at fair value under SFAS No. 157
at January 31, 2009 or July 31, 2008.

The following tables summarize the composition of the Companys marketable securities
at January 31, 2009 and July 31, 2008.



|                                          |  |      |        |                 |   |      |  |            |   |  |   |       
|----------------------------------------- |  | ---- | ------ | --------------- | - | ---- |  | ---------- | - |  | - | ------
|                                          |  |      |        | GrossUnrealized |   |     
|                                          |  | Cost |        | Gain            |   | Loss |  | Fair Value
|January 31, 2009                          |  |      |        |                 |   |      |  |            |   |  |   |       
|Held-to-Maturity Securities               |  |      |        |                 |   |      |  |            |   |  |   |       
|Certificates of deposit                   |  | $    | 65,700 |                 | $ |     |  | $          |  |  | $ | 65,700
|July 31, 2008                             |  |      |        |                 |   |      |  |            |   |  |   |       
|Held-to-Maturity Securities               |  |      |        |                 |   |      |  |            |   |  |   |       
|U.S. government and agency discount notes |  | $    | 12,530 |                 | $ |     |  | $          |  |  | $ | 12,530

All marketable securities held at January 31, 2009 mature within one year of that date.

There are no realized gains or losses on marketable securities, as the cost has approximated fair value.

5. Business combination

On April 14, 2008, the
Company acquired all of the outstanding capital stock of Copley Controls Corporation (Copley). Copley is a supplier of gradient amplifiers for Magnetic Resonance Imaging (MRI) and precision motion control systems used in
computer-controlled automation systems. This acquisition has enabled the Company to expand its product offerings to its OEM customers, pursue new opportunities in Asia, enhance its position as a provider of medical subsystems for MRI scanners, and
provide additional opportunities in the high-technology automation market.

The estimated purchase price, net of cash acquired, was
approximately $74,032, which consisted of $76,875 of cash paid upon closing, $734 of transaction costs, which primarily consisted of fees incurred by the Company for financial advisory, legal and accounting services, $1,066 for estimated working
capital adjustment payments, of which the entire amount was paid prior to July 31, 2008, and $350 due to the former stockholders of Copley to reimburse them for the additional tax costs of making an election to treat the acquisition as an asset
sale for tax purposes, net of cash acquired of $4,993. The total amount paid through January 31 2009, net of cash acquired, was $73,682.



11



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The Companys consolidated financial statements include the results of Copley from the date of
acquisition. The purchase price has been allocated to the assets acquired and the liabilities assumed based on estimated fair values as of the acquisition date.

The following represents the purchase price allocation:



|                                                                  |  |        |  |   |         |  
|----------------------------------------------------------------- |  | ------ |  | - | ------- | -
|Current assets                                                    |  |        |  | $ | 36,152  |  
|Property, plant, and equipment                                    |  |        |  |   | 3,912   |  
|Goodwill                                                          |  |        |  |   | 2,418   |  
|Intangible assets:                                                |  |        |  |   |         |  
|Developed technology (weighted-average useful life of 11 years)   |  | 11,771 |  |   |         |  
|Customer relationships (weighted-average useful life of 14 years) |  | 25,200 |  |   |         |  
|Tradename (indefinite life)                                       |  | 7,607  |  |   |         |  
|Backlog (estimated useful life of 0.5 years)                      |  | 2,063  |  |   |         |  
|                                                                  |  |        |  |   |         |  
|Total intangible assets                                           |  |        |  |   | 46,641  |  
|Current liabilities                                               |  |        |  |   | (10,098 | )
|                                                                  |  |        |  |   |         |  
|Total purchase price                                              |  |        |  | $ | 79,025  |  
|                                                                  |  |        |  |   |         |  

In determining the purchase price allocation, the Company considered, among other factors, its
intention to use the acquired assets and the historical and estimated future demand for Copley products and services. The fair value of developed technology and tradename intangible assets were based upon the relief from royalty approach while the
customer relationship and backlog intangible assets were based on the income approach. The rate used to discount the estimated future net cash flows to their present values for each intangible asset was based upon a weighted average cost of capital
ranging from 15.5% to 20.0%. The discount rate was determined after consideration of market rates of return on debt and equity capital, the weighted average return on invested capital and the risk associated with achieving forecasted sales related
to the technology and assets acquired from Copley.

The total weighted average amortization period for the intangible assets is
approximately 12 years. The intangible assets are being amortized on a straight-line basis, which is consistent with the pattern that the economic benefits of the intangible assets are expected to be utilized based upon estimated cash flows
generated from such assets. The goodwill is classified within the Companys Medical Imaging Products segment.

In connection with the
acquisition of Copley, the Company commenced integration activities which have resulted in recognizing $1,276 in liabilities for personnel-related costs and $150 for idle facility space. The Company expects to pay a substantial amount of the
liabilities associated with the personnel-related costs and idle facility space through fiscal year 2009. Approximately $514 has been paid as of January 31, 2009.

The following pro forma information gives effect to the acquisition of Copley as if the acquisition occurred at the beginning of the prior year comparative period for which pro forma results have been shown. The pro
forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the period presented:



|                              |  |                                    |         |                                  |   |        
|----------------------------- |  | ---------------------------------- | ------- | -------------------------------- | - | -------
|                              |  | Three Months EndedJanuary 31, 2008 |         | Six Months EndedJanuary 31, 2008
|Net revenue                   |  | $                                  | 117,127 |                                  | $ | 232,907
|Net income                    |  |                                    | 5,781   |                                  |   | 11,361 
|Net income per share, basic   |  |                                    | 0.44    |                                  |   | 0.87   
|Net income per share, diluted |  |                                    | 0.44    |                                  |   | 0.86   



12



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The pro forma results for the three months ended January 31, 2008 included $1,031 and $1,598 of
expenses related to the amortization of both the backlog intangible asset and the inventory fair value adjustment from the purchase accounting, respectively, and pro forma results for the six months ended January 31, 2008 included $2,063 and
$1,598 of expenses related to the amortization of both the backlog intangible asset and the inventory fair value adjustment from the purchase accounting, respectively. The backlog and inventory valuation adjustment were completely amortized over six
and three months, respectively, from the date of acquisition.

6. Goodwill and other intangible assets:

The carrying amount of the goodwill at January 31, 2009 and July 31, 2008 of $2,418 and $3,534, respectively, is from the acquisition of Copley.
The decrease in goodwill of $1,116 from July 31, 2008 to January 31, 2009 is due primarily to an adjustment to the purchase price of $650 for the amount due to the former stockholders of Copley to reimburse them for the additional tax
costs of making an election to treat the acquisition as an asset sale for tax purposes. Also contributing to the decrease was an adjustment to deferred taxes of $466 in the purchase price allocation.

Intangible assets at January 31, 2009 and July 31, 2008 consisted of the following:



|                       |  |                  |        |                         |   |       |  |      |        |                         |   |        |  |   |       |  |   |       
|---------------------- |  | ---------------- | ------ | ----------------------- | - | ----- |  | ---- | ------ | ----------------------- | - | ------ |  | - | ----- |  | - | ------
|                       |  | January 31, 2009 |        | July 31, 2008          
|                       |  | Cost             |        | AccumulatedAmortization |   | Net   |  | Cost |        | AccumulatedAmortization |   | Net   
|Developed technology   |  | $                | 11,771 |                         | $ | 909   |  | $    | 10,862 |                         | $ | 11,771 |  | $ | 322   |  | $ | 11,449
|Customer relationships |  |                  | 25,200 |                         |   | 1,427 |  |      | 23,773 |                         |   | 25,200 |  |   | 529   |  |   | 24,671
|Tradename              |  |                  | 7,607  |                         |   |      |  |      | 7,607  |                         |   | 7,607  |  |   |      |  |   | 7,607 
|Backlog                |  |                  | 2,063  |                         |   | 2,063 |  |      |       |                         |   | 2,063  |  |   | 1,216 |  |   | 847   
|                       |  |                  |        |                         |   |       |  |      |        |                         |   |        |  |   |       |  |   |       
|Total                  |  | $                | 46,641 |                         | $ | 4,399 |  | $    | 42,242 |                         | $ | 46,641 |  | $ | 2,067 |  | $ | 44,574
|                       |  |                  |        |                         |   |       |  |      |        |                         |   |        |  |   |       |  |   |       

Amortization expense related to acquired intangible assets was $737 and $9 for the three months
ended January 31, 2009 and 2008, respectively, and $2,332 and $356 for the six months ended January 31, 2009 and 2008, respectively.

The estimated future amortization expenses related to intangible assets for each of the five succeeding fiscal years is expected to be as follows:



|                            |  |   |       
|--------------------------- |  | - | ------
|2009 (Remaining six months) |  | $ | 1,466 
|2010                        |  |   | 2,931 
|2011                        |  |   | 2,931 
|2012                        |  |   | 2,931 
|2013                        |  |   | 2,931 
|                            |  |   |       
|                            |  | $ | 13,190
|                            |  |   |       

SFAS No. 142, Goodwill and Other Intangible Assets, requires that
goodwill and indefinite lived intangible assets be tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the
reporting unit below its carrying value. Goodwill represents the purchase price in excess of the net amount assigned to assets acquired and liabilities assumed by the Company in connection with the acquisition of Copley on April 14, 2008. The
tradename represents the value allocated to the Copley tradename in connection with the acquisition of Copley. The goodwill and Copley tradename are part of the OEM reporting unit (the Reporting Unit), which the Company tests for
goodwill impairment during the second quarter of each fiscal year.



13



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The Company performed the first step of the two-step impairment test under SFAS No. 142 and
compared the fair value of the Reporting Unit to its carrying value during the second quarter of fiscal year 2009. The Companys approach considered both the market approach and income approach. Under the market approach, the fair value of the
Reporting Unit is based on trading and acquisition multiples. In the trading multiple approach, the Company assumed a control premium of 25% for the Reporting Unit, which was determined based on a range of control premiums for relevant recent
acquisitions. Under the income approach, the fair value of the Reporting Unit is based on the present value of estimated future cash flows. The income approach is dependent on a number of significant management assumptions including estimates of
future sales, future gross margin percentage, and discount rates. The discount rate of 14.5% was determined after consideration of market rates of return on debt and equity capital, the weighted average return on invested capital and the risk
associated with achieving forecasted sales for the Reporting Unit. Due to current market conditions, greater weighting was attributed to the market approach, which was weighted 60% while the income approach was weighted 40% in arriving at the fair
value of the Reporting Unit. The Company determined that the fair value of the Reporting Unit was more than the carrying value of the net assets of the Reporting Unit, and thus it was not necessary for the Company to perform step two of the
impairment test.

Given the current economic environment and the uncertainties regarding the impact on the Companys business, there
can be no assurance that the Companys estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of its goodwill impairment testing during the second quarter of
fiscal year 2009 will prove to be accurate predictions of the future. If the Companys assumptions regarding forecasted revenue or margin growth rates of certain reporting units are not achieved, the Company may be required to record an
impairment charge for the goodwill and indefinite lived intangible asset in future periods, whether in connection with the Companys next annual impairment testing in the second quarter of fiscal year 2010, or prior to that if any such change
constitutes a triggering event outside of the quarter from when the annual goodwill impairment test is performed. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge
would be material.

7. Voluntary retirement and other restructuring costs:

In connection with the acquisition of Copley, the Company accrued for restructuring costs of $1,100 and $326 during the third and fourth quarters of
fiscal year 2008, respectively. Included in the total of $1,426 were costs of $323 for 29 employees that were terminated by the Company in January 2009. See Note 5 for additional information related to these restructuring accruals.

In May 2008, the Company notified approximately 32 employees in various departments of the organization that they would be terminated by July 31,
2008. The cost associated with these terminations, which included severance and personnel related costs, was $597 and recorded as a voluntary retirement and other restructuring cost in the fourth quarter of fiscal year 2008.

On June 4, 2008, the Company announced a voluntary retirement program for all of its U.S. employees, under which the retirements were substantially
completed by September 30, 2008. The total costs under this program for the 52 employees who participated in the program, including severance and personnel related costs, was $3,419 and was recorded as a voluntary retirement and other
restructuring cost during the fourth quarter of fiscal year 2008.

On January 28, 2009, the Company announced a plan to reduce its
workforce by 116 employees worldwide. The total costs of this plan, including severance and personnel related costs, were $3,488 and were recorded as a restructuring charge during the three and six months ended January 31, 2009.



14



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The following table summarizes accrued voluntary retirement and other restructuring costs activity
from January 31, 2008 through January 31, 2009:



|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  
|---------------------------------------- |  | ---------------------------- | ----- | - | -------------------------- | - | ------ | ----------------- |  | - | ----- | - |  | - | ------ | -
|                                         |  | InvoluntaryEmployeeSeverance |       |   | VoluntaryRetirementProgram |   |        | CopleyAcquisition |  |   | Total |  
|Balance at January 31, 2008              |  | $                            |      |   |                            | $ |       |                   |  | $ |      |   |  | $ |       |  
|Restructuring charge                     |  |                              |      |   |                            |   |       |                   |  |   |      |   |  |   |       |  
|Copley acquisition restructuring accrual |  |                              |      |   |                            |   |       |                   |  |   | 1,100 |   |  |   | 1,100  |  
|Cash payments                            |  |                              |      |   |                            |   |       |                   |  |   |      |   |  |   |       |  
|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  
|Balance at April 30, 2008                |  |                              |      |   |                            |   |       |                   |  |   | 1,100 |   |  |   | 1,100  |  
|Restructuring charge                     |  |                              | 597   |   |                            |   |       |                   |  |   |      |   |  |   | 597    |  
|Copley acquisition restructuring accrual |  |                              |      |   |                            |   |       |                   |  |   | 326   |   |  |   | 326    |  
|Voluntary retirement costs               |  |                              |      |   |                            |   | 3,419  |                   |  |   |      |   |  |   | 3,419  |  
|Cash payments                            |  |                              | (288  | ) |                            |   | (24    | )                 |  |   | (50   | ) |  |   | (362   | )
|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  
|Balance at July 31, 2008                 |  |                              | 309   |   |                            |   | 3,395  |                   |  |   | 1,376 |   |  |   | 5,080  |  
|Restructuring charge                     |  |                              |      |   |                            |   |       |                   |  |   |      |   |  |   |       |  
|Cash payments                            |  |                              | (266  | ) |                            |   | (3,287 | )                 |  |   | (113  | ) |  |   | (3,666 | )
|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  
|Balance at October 31, 2008              |  |                              | 43    |   |                            |   | 108    |                   |  |   | 1,263 |   |  |   | 1,414  |  
|Restructuring charge                     |  |                              | 3,488 |   |                            |   |       |                   |  |   |      |   |  |   | 3,488  |  
|Cash payments                            |  |                              | (96   | ) |                            |   | (83    | )                 |  |   | (351  | ) |  |   | (530   | )
|Foreign exchange                         |  |                              | (39   | ) |                            |   |       |                   |  |   |      |   |  |   | (39    | )
|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  
|Balance at January 31, 2009              |  | $                            | 3,396 |   |                            | $ | 25     |                   |  | $ | 912   |   |  | $ | 4,333  |  
|                                         |  |                              |       |   |                            |   |        |                   |  |   |       |   |  |   |        |  

The remaining cash expenditures as of January 31, 2009 consist of approximately $4,333 in
employee severance, of which a substantial amount will be paid within the next 12 months.

8. Balance sheet information:

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



|                                                     |  |                 |        |              |   |       
|---------------------------------------------------- |  | --------------- | ------ | ------------ | - | ------
|                                                     |  | January 31,2009 |        | July 31,2008
|Inventories:                                         |  |                 |        |              |   |       
|Raw materials                                        |  | $               | 46,206 |              | $ | 43,689
|Work-in-process                                      |  |                 | 18,847 |              |   | 16,893
|Finished goods                                       |  |                 | 16,595 |              |   | 18,615
|                                                     |  |                 |        |              |   |       
|                                                     |  | $               | 81,648 |              | $ | 79,197
|                                                     |  |                 |        |              |   |       
|Accrued liabilities:                                 |  |                 |        |              |   |       
|Accrued employee compensation and benefits           |  | $               | 10,929 |              | $ | 17,413
|Accrued voluntary retirement and restructuring costs |  |                 | 4,333  |              |   | 5,080 
|Accrued warranty                                     |  |                 | 5,009  |              |   | 5,403 
|Other                                                |  |                 | 4,897  |              |   | 6,656 
|                                                     |  |                 |        |              |   |       
|                                                     |  | $               | 25,168 |              | $ | 34,552
|                                                     |  |                 |        |              |   |       
|Advance payments and deferred revenue:               |  |                 |        |              |   |       
|Deferred revenue                                     |  | $               | 7,848  |              | $ | 8,569 
|Customer deposits                                    |  |                 | 3,095  |              |   | 2,216 
|                                                     |  |                 |        |              |   |       
|                                                     |  | $               | 10,943 |              | $ | 10,785
|                                                     |  |                 |        |              |   |       



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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



9. Net income per share:

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered
outstanding for purposes of calculating basic net income per share. Diluted net income per share is computed using the sum of the weighted average number of common shares outstanding during the period and, if dilutive, the weighted average number of
potential shares of Common Stock, including unvested restricted stock and the assumed exercise of stock options using the treasury stock method.



|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|------------------------------------------------------------ |  | ----------------------------- | ------ | --------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                             |  | Three Months EndedJanuary 31, |        | Six Months EndedJanuary 31,
|                                                             |  | 2009                          |        | 2008                        |   | 2009   |  | 2008
|Net income                                                   |  | $                             | 1,419  |                             | $ | 7,147  |  | $    | 1,739  |  | $ | 13,535
|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|Weighted average number of common shares outstanding-basic   |  |                               | 12,829 |                             |   | 13,174 |  |      | 13,030 |  |   | 13,133
|Effect of dilutive securities:                               |  |                               |        |                             |   |        |  |      |        |  |   |       
|Stock options and restricted stock                           |  |                               | 47     |                             |   | 97     |  |      | 95     |  |   | 112   
|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|Weighted average number of common shares outstanding-diluted |  |                               | 12,876 |                             |   | 13,271 |  |      | 13,125 |  |   | 13,245
|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|Net loss earnings per share:                                 |  |                               |        |                             |   |        |  |      |        |  |   |       
|Basic                                                        |  | $                             | 0.11   |                             | $ | 0.54   |  | $    | 0.13   |  | $ | 1.03  
|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|Diluted                                                      |  | $                             | 0.11   |                             | $ | 0.54   |  | $    | 0.13   |  | $ | 1.02  
|                                                             |  |                               |        |                             |   |        |  |      |        |  |   |       
|Anti-dilutive shares related to outstanding stock options    |  |                               | 533    |                             |   | 71     |  |      | 361    |  |   | 73    

10. Dividends:

The Company declared a dividend of $0.10 per share of Common Stock on September 25, 2008, which was paid on October 20, 2008 to stockholders of record on October 6, 2008. The Company also declared a
dividend of $0.10 per share of Common Stock on December 4, 2008, which was paid on December 31, 2008 to stockholders of record on December 18, 2008. The Company also declared a dividend of $0.10 per share of Common Stock on
March 3, 2009, which will be paid on March 31, 2009 to stockholders of record on March 17, 2009.



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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



11. Comprehensive income (loss):

Components of comprehensive income (loss) include net income and certain transactions that have generally been reported as a component of Stockholders Equity. The following table presents the calculation of
total comprehensive income (loss) and its components:



|                                                                                                                                                                                                                                                                                |  |                               |       |                             |      |   |       |  |   |         |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------- | ----- | --------------------------- | ---- | - | ----- |  | - | ------- | - |  | - | ------ | -
|                                                                                                                                                                                                                                                                                |  | Three Months EndedJanuary 31, |       | Six Months EndedJanuary 31, |     
|                                                                                                                                                                                                                                                                                |  | 2009                          |       |                             | 2008 |   | 2009  |  |   | 2008    |  
|Net Income                                                                                                                                                                                                                                                                      |  | $                             | 1,419 |                             |      | $ | 7,147 |  | $ | 1,739   |   |  | $ | 13,535 |  
|Other comprehensive income (loss), net of taxes:                                                                                                                                                                                                                                |  |                               |       |                             |      |   |       |  |   |         |   |  |   |        |  
|Pension adjustment, net of tax provisions of $1 and $16 for the three months ended January 31, 2009 and 2008, respectively, and a tax
provision of $10 and a tax benefit of $15 for the six months ended January 31, 2009 and 2008, respectively.                               |  |                               | 1     |                             |      |   | 25    |  |   | 16      |   |  |   | (23    | )
|Foreign currency translation adjustment, net of tax benefits of $103 and $284 for the three months ended January 31, 2009 and 2008,
respectively, and a tax benefit of $1,286 and a tax provision of $308 for the the six months ended January 31, 2009 and 2008, respectively. |  |                               | (440  | )                           |      |   | 751   |  |   | (15,624 | ) |  |   | 4,969  |  
|                                                                                                                                                                                                                                                                                |  |                               |       |                             |      |   |       |  |   |         |   |  |   |        |  
|Total comprehensive income (loss)                                                                                                                                                                                                                                               |  | $                             | 980   |                             |      | $ | 7,923 |  | $ | (13,869 | ) |  | $ | 18,481 |  
|                                                                                                                                                                                                                                                                                |  |                               |       |                             |      |   |       |  |   |         |   |  |   |        |  

The components of accumulated other comprehensive income, net of taxes, at January 31, 2009
and July 31, 2008 are as follows:



|                                        |  |                  |       |   |               |   |        |  
|--------------------------------------- |  | ---------------- | ----- | - | ------------- | - | ------ | -
|                                        |  | January 31, 2009 |       |   | July 31, 2008 |  
|Foreign currency translation adjustment |  | $                | 3,045 |   |               | $ | 18,669 |  
|Pension adjustment                      |  |                  | (81   | ) |               |   | (97    | )
|                                        |  |                  |       |   |               |   |        |  
|Total                                   |  | $                | 2,964 |   |               | $ | 18,572 |  
|                                        |  |                  |       |   |               |   |        |  



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ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



12. Supplemental disclosure of cash flow information:

The changes in operating assets and liabilities were as follows:



|                                                |  |                             |         |   |      |   |        |  
|----------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------ | -
|                                                |  | Six Months EndedJanuary 31, |        
|                                                |  | 2009                        |         |   | 2008 |  
|Accounts receivable                             |  | $                           | (258    | ) |      | $ | 3,443  |  
|Inventories                                     |  |                             | (6,427  | ) |      |   | (2,541 | )
|Other assets                                    |  |                             | (812    | ) |      |   | 632    |  
|Refundable income taxes                         |  |                             | 4,002   |   |      |   |       |  
|Accounts payable                                |  |                             | (1,874  | ) |      |   | (1,869 | )
|Accrued liabilities                             |  |                             | (10,989 | ) |      |   | (3,456 | )
|Advance payments and deferred revenue           |  |                             | 898     |   |      |   | (639   | )
|Other liabilities                               |  |                             | (172    | ) |      |   |       |  
|Accrued income taxes                            |  |                             | 149     |   |      |   | (227   | )
|                                                |  |                             |         |   |      |   |        |  
|Net changes in operating assets and liabilities |  | $                           | (15,483 | ) |      | $ | (4,657 | )
|                                                |  |                             |         |   |      |   |        |  

13. Taxes:

The Companys income tax benefits of $1,695 and $2,158 for the three and six months ended January 31, 2009, respectively, were due primarily to the Internal Revenue Service (IRS) income tax
refund of $6,459 received in December 2008. The refund, which included $1,065 of interest, was for the carryback of a loss and research and development credits from the fiscal year ended July 31, 2004 and from additional research and
development tax credits claimed on amended income tax returns for the fiscal years ended July 31, 2001 through 2003. The impact of this refund and related interest was a reduction of unrecognized tax benefits by approximately $3,280, of which
$1,232 was recorded as a tax benefit in both the three and six months ended January 31, 2009. Also contributing to the income tax benefits for the three and six months ended January 31, 2009 were discrete benefits of $391 for previously
unrecognized tax benefits resulting from the settlement of the IRS audit, partially offset by additional provisions for agreed federal and state adjustments. The income tax benefit for the six months ended January 31, 2009 also includes a
discrete tax benefit of $404 for the reinstatement of the federal research and experimentation credit back to January 1, 2008.

The
Companys effective income tax rates were provisions of 33.2% and 33.1% for the three and six months ended January 31, 2008, respectively. For the three and six months ended January 31, 2008, the effective tax rate varied from the
statutory tax rate primarily as a result of the mix of income attributable to foreign versus domestic jurisdictions. The Companys aggregate income tax rate in foreign jurisdictions is lower than its income tax rate in the United States. During
the three months ended January 31, 2008, the Company recognized discrete tax benefits of $33 that resulted from employees disqualifying dispositions of qualified incentive stock options. For the six months ended January 31, 2008, the
Company recognized discrete net tax benefits of $56 due primarily to the change in tax rate on certain foreign deferred tax assets and the tax benefit from employees disqualifying dispositions of qualified incentive stock options.

The Company adopted FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes at the beginning
of fiscal year 2008. FIN No. 48 requires management to perform a two-step evaluation of all tax positions, ensuring that these tax return positions meet the more likely than not recognition threshold and can be measured with
sufficient precision to determine the benefit recognized in the financial statements. These evaluations provide management with a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements
certain tax positions that the Company has taken or expects to take on its income tax returns. As a result of the implementation of FIN No. 48, the Company recognized a net increase of $2,239 to the August 1, 2007 retained earnings
balance, which consisted of a non-current other asset and accrued income taxes of $3,806 and $1,567, respectively. At July 31, 2008, the total amount of gross unrecognized tax benefits, which excludes interest and penalties discussed below, was
approximately $18,296. The unrecognized tax benefits have decreased to $15,066 at January 31, 2009; these benefits, if recognized in a future period, the timing of which is not estimable, would impact the Companys effective tax rate.



18



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



Analogic and its subsidiaries are subject to U.S. federal income tax as well as the income tax of
multiple state and foreign jurisdictions. The Company has concluded all U.S. federal income tax matters for fiscal years through July 31, 2002. As of January 31, 2009, Analogic was under audit by the IRS for the fiscal year ended
July 31, 2007.

The Company also has an unresolved state tax audit currently under appeal and one in progress. It is reasonably
possible that a reduction in the unrecognized tax benefits may occur as a result of some or all of the matters concluding, but quantification of an estimated range cannot be made at this time. Within the next four fiscal quarters, the statute of
limitations may close on the 2005 federal and state income tax returns and it is reasonably expected that net unrecognized tax benefits of $780 from these jurisdictions may be recognized in the next four quarters.

Within the next four fiscal quarters, the statute of limitations will close on the 2003 and 2004 tax returns filed in various foreign jurisdictions. As a
result, it is reasonably expected that net unrecognized tax benefits from these foreign jurisdictions may be recognized within the next four quarters. The recognition of these tax benefits is not expected to have a material impact on the
Companys financial statements.

The Company has net operating loss carryforwards in Belgium of approximately $4,200 that are subject
to a valuation allowance. It is reasonably possible that the valuation allowance could reverse in the next twelve months.

The Company
accrues interest and, if applicable, penalties for any uncertain tax positions. This interest and penalty expense will be a component of income tax expense. At the date of adoption of FIN No. 48 and at January 31, 2009, the Company had
approximately $1,025 and $1,161, respectively, accrued for interest on unrecognized tax benefits.

14. Segment information:

The Company operates primarily within two major markets within the electronics industry: Medical Technology Products and Security Technology Products.
Medical Technology Products consists of three reporting segments: Medical Imaging Products, which consists primarily of electronic systems and subsystems for medical imaging equipment and patient monitoring; Digital Radiography Products, which
consists primarily of x-ray detectors and direct digital radiography systems for diagnostic and interventional applications in mammography, orthopedic, and general radiology applications; and B-K Medical ApS (B-K Medical) for ultrasound
systems and probes in the urology, surgery, and radiology markets. Security Technology Products consists of advanced weapon and threat detection aviation security systems and subsystems. The Companys Corporate and Other segment represents the
Companys hotel business and net interest income. The accounting policies of the segments are the same as those described in the summary of Significant Accounting Policies included in Note 1 of the Notes to Consolidated Financial Statements in
the Companys Annual Report on Form 10-K for fiscal year 2008.



19



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



The table below presents information about the Companys reportable segments.



|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|---------------------------------------------------- |  | ----------------------------- | ------- | - | --------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                     |  | Three Months EndedJanuary 31, |         |   | Six Months EndedJanuary 31, |  
|                                                     |  | 2009                          |         |   | 2008                        |   |        | 2009 |  |   | 2008    |  
|Revenues:                                            |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Medical Technology Products from external customers: |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Medical Imaging Products (A)                         |  | $                             | 61,792  |   |                             | $ | 53,620 |      |  | $ | 121,036 |   |  | $ | 105,739 |  
|Digital Radiography products                         |  |                               | 6,772   |   |                             |   | 5,767  |      |  |   | 14,226  |   |  |   | 10,633  |  
|B-K Medical                                          |  |                               | 20,848  |   |                             |   | 24,698 |      |  |   | 39,736  |   |  |   | 45,203  |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|                                                     |  |                               | 89,412  |   |                             |   | 84,085 |      |  |   | 174,998 |   |  |   | 161,575 |  
|Security Technology Products from external customers |  |                               | 11,240  |   |                             |   | 12,875 |      |  |   | 24,094  |   |  |   | 26,211  |  
|Corporate and Other                                  |  |                               | 2,063   |   |                             |   | 2,440  |      |  |   | 5,175   |   |  |   | 5,815   |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Total                                                |  | $                             | 102,715 |   |                             | $ | 99,400 |      |  | $ | 204,267 |   |  | $ | 193,601 |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Income (loss) before income taxes                    |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Medical Technology Products:                         |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Medical Imaging Products (B)                         |  | $                             | (1,213  | ) |                             | $ | 5,631  |      |  | $ | (2,664  | ) |  | $ | 11,395  |  
|Digital Radiography Products                         |  |                               | (19     | ) |                             |   | (2,251 | )    |  |   | 540     |   |  |   | (4,066  | )
|B-K Medical                                          |  |                               | 827     |   |                             |   | 3,044  |      |  |   | (1,278  | ) |  |   | 3,966   |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|                                                     |  |                               | (405    | ) |                             |   | 6,424  |      |  |   | (3,402  | ) |  |   | 11,295  |  
|Security Technology Products                         |  |                               | 383     |   |                             |   | 1,384  |      |  |   | 1,930   |   |  |   | 2,678   |  
|Corporate and Other                                  |  |                               | (254    | ) |                             |   | 2,898  |      |  |   | 1,053   |   |  |   | 6,268   |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  
|Total                                                |  | $                             | (276    | ) |                             | $ | 10,706 |      |  | $ | (419    | ) |  | $ | 20,241  |  
|                                                     |  |                               |         |   |                             |   |        |      |  |   |         |   |  |   |         |  



|                             |  |                  |         |               |   |        
|---------------------------- |  | ---------------- | ------- | ------------- | - | -------
|                             |  | January 31, 2009 |         | July 31, 2008
|Identifiable assets:         |  |                  |         |               |   |        
|Medical Imaging Products (C) |  | $                | 150,707 |               | $ | 146,854
|Digital Radiography Products |  |                  | 24,847  |               |   | 35,122 
|B-K Medical                  |  |                  | 84,030  |               |   | 101,455
|Security Technology Products |  |                  | 13,077  |               |   | 13,011 
|Corporate and Other (D)      |  |                  | 185,242 |               |   | 214,723
|                             |  |                  |         |               |   |        
|Total                        |  | $                | 457,903 |               | $ | 511,165
|                             |  |                  |         |               |   |        



|(A) | Includes Copley revenues for the three and six months ended January 31, 2009 of $15,922 and $35,476, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------



|(B) | Includes Copley loss before taxes for the three and six months ended January 31, 2009 of $757 and $1,035, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------



|(C) | Includes goodwill and net intangible assets from the acquisition of Copley of $2,418 and $42,242, respectively, at January 31, 2009, and $3,534 and $44,574, respectively, at
July 31, 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(D) | Includes cash and cash equivalents and marketable securities of $111,551 and $132,433 at January 31, 2009 and July 31, 2008, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

ANALOGIC CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Continued)



15. Commitments and guarantees:

In November 2002, the FASB issued FIN No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34.FIN No. 45 requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by
issuing the guarantee. The following is a summary of agreements that the Company has determined are within the scope of FIN No. 45.

The Companys standard OEM and supply agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the
indemnified party for losses suffered or incurred by the indemnified party in connection with any United States patent, or any copyright or other intellectual property infringement claim by any third party with respect to the Companys
products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited. The
Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes that its estimated exposure on these agreements is currently minimal. Accordingly, the Company has no
liabilities recorded for these agreements as of January 31, 2009.

Generally, the Company warrants that its products will perform in
all material respects in accordance with its standard published specifications in effect at the time of delivery of the products to the customer for a period ranging from 12 to 24 months from the date of delivery. The Company provides for the
estimated cost of product and service warranties based on specific warranty claims, claim history and engineering estimates, where applicable.

The following table presents the Companys product warranty liability for the reporting periods:



|                                                      |  |                               |       |   |                             |   |       |      |  |   |        |   |  |   |        |  
|----------------------------------------------------- |  | ----------------------------- | ----- | - | --------------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                      |  | Three Months EndedJanuary 31, |       |   | Six Months EndedJanuary 31, |  
|                                                      |  | 2009                          |       |   | 2008                        |   |       | 2009 |  |   | 2008   |  
|Balance at the beginning of the period                |  | $                             | 4,884 |   |                             | $ | 5,489 |      |  | $ | 5,403  |   |  | $ | 5,241  |  
|Accrual                                               |  |                               | 973   |   |                             |   | 937   |      |  |   | 1,695  |   |  |   | 2,251  |  
|Settlements made in cash or in kind during the period |  |                               | (848  | ) |                             |   | (830  | )    |  |   | (2,089 | ) |  |   | (1,896 | )
|                                                      |  |                               |       |   |                             |   |       |      |  |   |        |   |  |   |        |  
|Balance at the end of the period                      |  | $                             | 5,009 |   |                             | $ | 5,596 |      |  | $ | 5,009  |   |  | $ | 5,596  |  
|                                                      |  |                               |       |   |                             |   |       |      |  |   |        |   |  |   |        |  

The Company currently has approximately $22,500 in revolving credit facilities with banks
available for direct borrowings. The Companys revolving credit facility agreement contains a number of covenants, including a covenant requiring the Company to maintain a tangible net worth (as defined in the revolving credit facility
agreement) of no less than $255,000 as of the end of any fiscal quarter. The Company was in compliance with this covenant at January 31, 2009 with a tangible net worth of approximately $340,400. As of January 31, 2009, there were no direct
borrowings or off-balance sheet arrangements.

16. Common Stock repurchase:

On October 13, 2008, the Company announced that, on the same date, its Board of Directors had authorized the repurchase of up to $25,000 of the
Companys Common Stock. The Company completed the repurchase program, which was funded using the Companys available cash, in the second quarter of fiscal year 2009. During the three and six months ended January 31, 2009, the Company
repurchased 648,020 and 736,694 shares, respectively, of Common Stock under this repurchase program for $21,520 and $25,022, respectively, at an average purchase price per share of $33.21 and $33.97, respectively. Included in the $25,022 paid for
the Common Stock under this program was $22 of commissions and fees to the Companys broker.



21



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion provides an analysis of the financial condition and results of operations for Analogic Corporation and its subsidiaries (the
Company) and should be read in conjunction with the Unaudited Consolidated Financial Statements and Notes thereto included elsewhere in this report. The discussion below contains forward-looking statements within the meaning of the
Securities Exchange Act of 1934, as amended (the Exchange Act). All statements, other than statements of historical fact, the Company makes in this document are forward looking statements. Such forward-looking statements involve known
and unknown risks, uncertainties, and other factors, including those set forth in Part II. Item 1A. Risk Factors, which may cause the actual results, performance, or achievements of the Company to differ materially from the
projected results.

The Company reports its financial condition and results of operations on a fiscal year basis ending July 31. The
periods ended January 31, 2009 and 2008 represent the second quarters of the 2009 and 2008 fiscal years, respectively. All dollar amounts in this Item 2 are in thousands except per share data.

Summary

The Company is engaged primarily in the
design, manufacture and sale of high performance data acquisition and signal processing instruments to customers that manufacture products primarily for two major markets within the electronics industry: Medical Technology Products and Security
Technology Products. Medical Technology Products consists of three reporting segments: Medical Imaging Products, which consists primarily of electronic systems and subsystems for medical imaging equipment and patient monitoring; Digital Radiography
Products, which consists primarily of x-ray detectors and direct digital radiography systems for diagnostic and interventional applications in mammography, orthopedic, and general radiology applications; and B-K Medical ApS (B-K Medical)
for ultrasound systems and probes in the urology, surgery, and radiology markets. Security Technology Products consists of advanced weapon and threat detection aviation security systems and subsystems. The Companys Corporate and Other segment
represents the Companys hotel business and net interest income.

A significant portion of the Companys products are sold to
Original Equipment Manufacturers (OEMs), whose purchasing dynamics have an impact on the Companys reported sales. OEMs that purchase the Companys Medical Imaging and Digital Radiography Products generally incorporate those
products as components in their systems, which are in turn sold to end users, primarily hospitals and clinics. Over the last nine months, Medical Imaging Products OEM customers have been impacted by the U.S Deficit Reduction Act (DRA).
The DRA reduced government reimbursement rates for doctors utilizing medical imaging procedures for their patients. In addition, the deterioration of global economic conditions over the last six months has resulted in reduced endowments and funding
of hospitals and clinics. In response, these end users have begun to reduce the capital available for investment in new facilities, expansions or upgrades. As such, Medical Imaging Products OEMs have experienced reductions in demand for their
products and have in turn reduced their procurement spending.

In the Companys Security Technology Products business, a major OEM
customer purchases and resells the Companys products to end users including domestic and foreign airports as well as the U.S Transportation Security Authority (TSA). In Security Technology Products, the Companys OEM customer
purchasing dynamics are generally affected by the level of government funding, the expansion of airport terminals and the continuing increase in airline passenger volume. It is expected that the recently signed American Recovery and Reinvestment Act
may result in additional government funding for security scanners of checked and carry-on baggage.

Over the past several years the Company
has had significant cash and marketable securities balances, which over the past year have been impacted by a reduction in interest rates. The Company has historically invested in U.S government backed securities, bonds, and certificates of deposit,
the interest rates of which have declined significantly over the last year. Also contributing to the decline in interest income of approximately 69% for the three months ended January 31, 2009 as compared to the three months ended
January 31, 2008 were Copley Controls Corporation (Copley) acquisition related costs of $73,332 in the third quarter of fiscal year 2008 and repurchases of Common Stock of $85,022 since April 30, 2007.

The Company performed the first step of the two-step impairment test under Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets, and compared the fair value of the OEM Reporting Unit (the Reporting Unit) to its carrying value during the second quarter of fiscal year 2009. The Company determined that the fair
value of the Reporting Unit was more than the carrying value of the net assets of the Reporting Unit, and thus there was no impairment.



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##### Table of Contents

Given the current economic environment and the uncertainties regarding the impact on the Companys
business, there can be no assurance that the Companys estimates and assumptions regarding the duration of the ongoing economic downturn, or the period or strength of recovery, made for purposes of its goodwill impairment testing during the
second quarter of fiscal year 2009 will prove to be accurate predictions of the future. If the Companys assumptions regarding forecasted revenue or margin growth rates of certain reporting units are not achieved, the Company may be required to
record an impairment charge for the goodwill and indefinite lived intangible asset in future periods, whether in connection with the Companys next annual impairment testing in the second quarter of fiscal year 2010, or prior to that if any
such change constitutes a triggering event outside of the quarter from when the annual goodwill impairment test is performed. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such
charge would be material.

The following table sets forth key financial data and growth rates for the three months ended January 31,
2009 and 2008. This summary is not a substitute for the detail provided in the following pages or for the Unaudited Consolidated Financial Statements and Notes that appear elsewhere in this document.



|                              |  |                              |         |                  |      |   |        |  |      |  
|----------------------------- |  | ---------------------------- | ------- | ---------------- | ---- | - | ------ |  | ---- | -
|                              |  | Three Month EndedJanuary 31, |         | PercentageGrowth |     
|                              |  | 2009                         |         |                  | 2008 |  
|Total net revenue             |  | $                            | 102,715 |                  |      | $ | 99,400 |  | 3    | %
|Income (loss) from operations |  |                              | (1,507  | )                |      |   | 7,801  |  | -119 | %
|Net income                    |  |                              | 1,419   |                  |      |   | 7,147  |  | -80  | %
|Diluted net income per share  |  |                              | 0.11    |                  |      |   | 0.54   |  | -80  | %

Net revenue for the three months ended January 31, 2009 was $3,315, or 3%, higher than the
same period last year, due primarily to an increase in engineering revenue of $3,479, or 127%. While product revenue remained relatively consistent for the three months ended January 31, 2009 as compared to the same period last year, the
Company had $15,471 of product revenue from Copley, which the Company acquired in April 2008. The increase in product revenues from Copley was offset by a decline in demand for core Medical Technology Products and Security Technology Products.

Income (loss) from operations, net income, and diluted net income per share in the three months ended January 31, 2009 declined from
the three months ended January 31, 2008 due primarily to a decline in gross margin contribution as well as an increase in operating expenses. The decline in gross margin was due primarily to amortization of acquisition related intangible
assets, unfavorable product mix, and manufacturing inefficiencies related to lower production volumes. The increase in operating expenses was due primarily to Copley operating expenses of $3,835, contingent professional fees of $688 related to an
income tax refund and related interest of $6,459 received from the Internal Revenue Service (IRS) in December 2008, and a restructuring charge of $3,488 in the three months ended January 31, 2009. On January 28, 2009, the
Company announced a plan to reduce its workforce by 116 employees worldwide. The total cost of this plan, including severance and personnel related costs, were $3,488 and were recorded as a restructuring charge during the three and six months ended
January 31, 2009. The Company also terminated 29 employees from Copley in January 2009. The severance and personnel related costs of $323 for the Copley employees were accrued for in fiscal year 2008 in connection with the acquisition. The
savings from the termination of the 145 employees on an annual basis is estimated to be approximately $9,800.

Net income and diluted net
income per share were further impacted by a decline in net interest income of $1,717, due primarily to lower effective interest rates and lower invested cash balances, partially offset by a decrease in the effective tax rate. For the three months
ended January 31, 2009, we realized a significant tax benefit as compared to a provision of 33% for the three months ended January 31, 2008. The tax benefit for the three months ended January 31, 2009 was due primarily to the income
tax refund from the IRS of $6,459, which included interest of $1,065. The impact of this refund and related interest was a reduction of unrecognized tax benefits by approximately $3,280, of which $1,232 was recorded as tax benefit in both the three
and six months ended January 31, 2009.

On October 13, 2008, the Company announced that, on the same date, its Board of Directors
had authorized the repurchase of up to $25,000 of the Companys Common Stock. The Company completed the repurchase program, which was funded using the Companys available cash, in the second quarter of fiscal year 2009. During the three
and six months ended January 31, 2009, the Company repurchased 648,020 and 736,694 shares, respectively, of Common Stock under this repurchase program for $21,520 and $25,022, respectively, at an average purchase price per share of $33.21 and
$33.97, respectively. Included in the $25,022 paid for the Common Stock under this program was $22 of commissions and fees to the Companys broker.



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##### Table of Contents

Results of Operations

Three Months Ended January 31, 2009 vs. Three Months Ended January 31, 2008

Net Revenue and Gross Margin

Net revenue and gross margin for the three months ended January 31, 2009 as compared with the three months ended January 31,
2008 are summarized in the tables below.

Product Revenue and Gross Margin



|                |  |                               |        |   |                  |   |        |   |  |       |  
|--------------- |  | ----------------------------- | ------ | - | ---------------- | - | ------ | - |  | ----- | -
|                |  | Three Months EndedJanuary 31, |        |   | PercentageGrowth |  
|                |  | 2009                          |        |   | 2008             |   |       
|Product revenue |  | $                             | 94,444 |   |                  | $ | 94,231 |   |  | 0.2   | %
|Gross margin    |  |                               | 32,622 |   |                  |   | 37,056 |   |  | -12.0 | %
|Gross margin %  |  |                               | 34.5   | % |                  |   | 39.3   | % |  |       |  

Product revenue for the three months ended January 31, 2009 was consistent with the three
months ended January 31, 2008. While total product revenue was consistent, product revenue in Medical Imaging Products and Digital Radiography Products increased $6,370 and $1,178, respectively, offset by decreases in B-K Medical and Security
Technology Products of $3,850 and $3,485, respectively.

The increase in product revenue for Medical Imaging Products was due primarily to
the acquisition of Copley during April 2008, which accounted for $15,471 of product revenue in the three months ended January 31, 2009. This increase was partially offset by a decline in demand for data acquisition systems, detectors, and CT
subsystems due primarily to the DRA and the global economic crisis. The increase in product revenue for Digital Radiography Products was due primarily to an increase in shipments of mammography detectors to an OEM customer during the three months
ended January 31, 2009. The decrease in product revenue for B-K Medical was due primarily to an unfavorable change in the foreign currency exchange rate, which accounted for approximately $2,500 of the decrease. Also contributing to the
decrease was a decline in demand for ultrasound systems due to customer order delays in anticipation of two new ultrasound product lines, one of which was introduced late in the second quarter and the other of which will be introduced in the third
quarter of fiscal year 2009. The decrease in Security Technology Products was due primarily to a decrease in sales of spare parts and accessories of approximately $2,700 from the three months ended January 31, 2008 to the three months ended
January 31, 2009.

Product gross margin percentage decreased to 34.5% for the three months ended January 31, 2009, from 39.3% for
the three months ended January 31, 2008. The decline in the product gross margin percentage was due primarily to Medical Imaging Products. The decline in the Medical Imaging Products gross margin percentage was due primarily to the amortization
of intangible assets from the acquisition of Copley, a higher mix of lower margin Copley products, and reduced manufacturing efficiency caused by lower production volumes. The decline in the Medical Imaging Products gross margin percentage was
partially offset by increases in the product gross margin percentage of Digital Radiography Products and B-K Medical. The increase in the product gross margin percentage for Digital Radiography Products was due primarily to improved manufacturing
yields. The increase in the B-K Medical product gross margin was due primarily to favorable product and geographical mix.

Engineering
Revenue and Gross Margin



|                    |  |                               |       |   |                  |   |       |   |  |       |  
|------------------- |  | ----------------------------- | ----- | - | ---------------- | - | ----- | - |  | ----- | -
|                    |  | Three Months EndedJanuary 31, |       |   | PercentageGrowth |  
|                    |  | 2009                          |       |   | 2008             |   |      
|Engineering revenue |  | $                             | 6,208 |   |                  | $ | 2,729 |   |  | 127.5 | %
|Gross margin (loss) |  |                               | (85   | ) |                  |   | (391  | ) |  | -78.3 | %
|Gross margin %      |  |                               | -1.4  | % |                  |   | -14.3 | % |  |       |  

Engineering revenue increased $3,479, or 127.5%, for the three months ended January 31, 2009
as compared to the three months ended January 31, 2008. The increase in engineering revenue was due primarily to increases in Security Technology Products and Medical Imaging Products of $1,849 and $1,802, respectively. The increase in Security
Technology Products was due primarily to engineering revenue on a time and materials project with the TSA to transition the eXaminer XLB from a prototype into a product that can be manufactured. The increase in Medical Imaging Products was due
primarily to an increase in customer funded engineering projects.



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##### Table of Contents

The engineering gross loss decreased $306 to $85 for the three months ended January 31, 2009 as
compared to $391 for the three months ended January 31, 2008. The decrease was due primarily to an increase in gross margin on Security Technology Product projects as a result of more activity on higher gross margin projects partially offset by
an increase of costs incurred in excess of revenues on certain customer funded Medical Imaging Products projects.

Other Revenue

Other revenue of $2,063 and $2,440 represents revenue from the hotel operations for the three months ended January 31, 2009 and 2008,
respectively. The decrease was due primarily to lower occupancy.

Operating Expenses



|                                 |  |                               |        |                       |   |        |  |      |      |  |      |  
|-------------------------------- |  | ----------------------------- | ------ | --------------------- | - | ------ |  | ---- | ---- |  | ---- | -
|                                 |  | Three Months EndedJanuary 31, |        | Percentage of Revenue |  
|                                 |  | 2009                          |        | 2008                  |   | 2009   |  |      | 2008 | 
|Research and product development |  | $                             | 11,358 |                       | $ | 11,858 |  | 11.1 | %    |  | 11.9 | %
|Selling and marketing            |  |                               | 9,728  |                       |   | 7,985  |  | 9.4  | %    |  | 8.0  | %
|General and administrative       |  |                               | 9,836  |                       |   | 9,696  |  | 9.6  | %    |  | 9.8  | %
|Restructuring charge             |  |                               | 3,488  |                       |   |       |  | 3.4  | %    |  | 0.0  | %
|                                 |  |                               |        |                       |   |        |  |      |      |  |      |  
|                                 |  | $                             | 34,410 |                       | $ | 29,539 |  | 33.5 | %    |  | 29.7 | %
|                                 |  |                               |        |                       |   |        |  |      |      |  |      |  

Operating expenses increased $4,871 for the three months ended January 31, 2009 from the
three months ended January 31, 2008. The increase was due primarily to the acquisition of Copley in April 2008. During the three months ended January 31, 2009, Copley accounted for operating expenses of $3,835, of which $1,917, $1,211, and
$707 was for research and product development, selling and marketing, and general and administrative expenses, respectively. Also, contributing to the increase in operating expenses was the restructuring charge of $3,488 during the three months
ended January 31, 2009 for severance and personnel related costs of the restructuring plan implemented by management in January 2009.

Other items that contributed to the increase in operating expenses in the three months ended January 31, 2009 as compared to the three months ended January 31, 2008 was a decline in research and product development expenses due
primarily to more work on customer funded engineering projects and less spending on engineering materials. Additionally, the increase in general and administrative expenses from the three months ended January 31, 2008 to the three months ended
January 31, 2009 included $688 of contingent professional fees related to an income tax refund and related interest of $6,459 received from the IRS in December 2008.

Other Income

Net interest income was $767 for the three months ended January 31, 2009 compared
to $2,484 for the three months ended January 31, 2008. The decrease was due primarily to lower invested cash balances as a result of the acquisition of Copley, the Companys $25,022 Common Stock repurchase in the first and second quarters
of fiscal year 2009, and a decline in interest rates.

Net other income was $464 and $421 for the three months ended January 31, 2009
and 2008, respectively. Net other income consisted predominantly of foreign currency exchange gains by the Companys Canadian subsidiary during the three months ended January 31, 2009. Net other income in the three months ended
January 31, 2008 consisted primarily of $555 the Company received from its insurance company as reimbursement for legal fees incurred in relation to an indemnification matter related to the Companys sale of its wholly owned subsidiary,
Camtronics Medical Systems, Ltd. (Camtronics), in November 2005.



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##### Table of Contents

Provision for Income Taxes

The effective tax rate for the three months ended January 31, 2009 and 2008 was a benefit of 614% and a provision of 33%, respectively. The effective income tax rate is based upon the estimated income for the
fiscal year, the composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for the potential tax consequences, benefits, resolutions of tax audits or other tax contingencies. For the three months
ended January 31, 2009, the effective tax rate benefit of 614% was due primarily to the IRS refund of $6,459 received in December 2008. The refund, which included $1,065 of interest, was for the carryback of a loss and research and development
credits from the fiscal year 2004 and from additional research and development tax credits claimed on amended income tax returns for fiscal years 2001 through 2003. The impact of this refund and related interest was a reduction of unrecognized
tax benefits by approximately $3,280, of which $1,232 was recorded as a tax benefit in the three months ended January 31, 2009. Also contributing to the effective tax rate benefit for the three months ended January 31, 2009 were discrete
benefits of $391 for previously unrecognized tax benefits resulting from the settlement of the IRS audit, partially offset by additional provisions for agreed federal and state adjustments.

Net Income per Share

Net income as well as net
income per share for the three months ended January 31, 2009 and 2008 are as follows:



|                             |  |                               |       |   |      |   |       |  
|---------------------------- |  | ----------------------------- | ----- | - | ---- | - | ----- | -
|                             |  | Three Months EndedJanuary 31, |      
|                             |  | 2009                          |       |   | 2008 |  
|Net income                   |  | $                             | 1,419 |   |      | $ | 7,147 |  
|% of net revenue             |  |                               | 1.4   | % |      |   | 7.2   | %
|Diluted net income per share |  | $                             | 0.11  |   |      | $ | 0.54  |  

Net income was $1,419 for the three months ended January 31, 2009 as compared to net income
of $7,147 for the three months ended January 31, 2008. Basic and diluted net income per share were $0.11 for the three months ended January 31, 2009 as compared to basic and diluted net income per share of $0.54 for the three months ended
January 31, 2008. The decreases in net income as well as basic and diluted net income per share from the three months ended January 31, 2008 to the three months ended January 31, 2009 were due primarily to a decline in gross margin,
an increase in operating expenses, and a decline in interest income, partially offset by a decline in the effective income tax rate. Also partially offsetting the decrease in basic and diluted net income per share from the three months ended
January 31, 2008 to the three months ended January 31, 2009 was the Companys repurchase of 736,694 shares of Common Stock in the first two quarters of fiscal year 2009. The Common Stock repurchase was the primary driver in the
decline of the diluted weighted average shares outstanding to approximately 12,876,000 for the three months ended January 31, 2009 from approximately 13,271,000 for the three months ended January 31, 2008.

Six Months Ended January 31, 2009 vs. Six Months Ended January 31, 2008

Net Revenue and Gross Margin

Net revenue and gross margin for the six months ended January 31,
2009 as compared with the six months ended January 31, 2008 are summarized in the tables below.

Product Revenue and Gross Margin



|                |  |                             |         |   |                  |   |         |   |  |       |  
|--------------- |  | --------------------------- | ------- | - | ---------------- | - | ------- | - |  | ----- | -
|                |  | Six Months EndedJanuary 31, |         |   | PercentageGrowth |  
|                |  | 2009                        |         |   | 2008             |   |        
|Product revenue |  | $                           | 189,391 |   |                  | $ | 179,542 |   |  | 5.5   | %
|Gross margin    |  |                             | 62,291  |   |                  |   | 70,318  |   |  | -11.4 | %
|Gross margin %  |  |                             | 32.9    | % |                  |   | 39.2    | % |  |       |  



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##### Table of Contents

Product revenue for the six months ended January 31, 2009 increased $9,849, or 5.5%, over the six
months ended January 31, 2008. The increase in product revenue was due primarily to an increase in product revenue for Medical Imaging Products and Digital Radiography Products of $14,097 and $3,893, respectively, partially offset by decreases
in B-K Medical and Security Technology Products of $5,467 and $2,674, respectively.

The increase in product revenue for Medical Imaging
Products was due primarily to the acquisition of Copley during April 2008, which accounted for $35,026 of product revenue in the six months ended January 31, 2009. This increase was partially offset by a decline in demand for data acquisition
systems, detectors, and CT subsystems due primarily to the DRA and the global economic crisis. Digital Radiography Products revenues increased in response to a ramp up of shipments of mammography detectors to an OEM customer during the six months
ended January 31, 2009. B-K Medical product revenues declined due primarily to an unfavorable change in the foreign currency exchange rate, which accounted for approximately $2,900 of the decrease. Also contributing to the decrease was a
decline in demand for ultrasound systems due to customer order delays in anticipation of two new ultrasound product lines, one of which was introduced late in the second quarter and the other of which will be introduced in the third quarter of
fiscal year 2009. The decrease in Security Technology Products was due primarily to a decrease in sales of spare parts and accessories of approximately $4,300 from the six months ended January 31, 2008 to the six months ended January 31,
2009. The decrease in sales of spare parts and accessories was partially offset by 6 more baggage scanners shipped in the six months ended January 31, 2009 as compared to the six months ended January 31, 2008.

Product gross margin percentage decreased to 32.9% for the six months ended January 31, 2009, from 39.2% for the six months ended January 31,
2008. The decline in the product gross margin percentage was due primarily to Medical Imaging Products. The decline in the Medical Imaging Products gross margin percentage was due primarily to the amortization of intangible assets from the
acquisition of Copley, a higher mix of lower margin Copley products, and reduced manufacturing efficiency caused by lower production volumes. The decline in the Medical Imaging Products gross margin percentage was partially offset by an increase in
the product gross margin percentage of Digital Radiography Products due primarily to improved manufacturing yields.

Engineering Revenue
and Gross Margin



|                    |  |                             |       |   |                  |   |       |   |  |       |  
|------------------- |  | --------------------------- | ----- | - | ---------------- | - | ----- | - |  | ----- | -
|                    |  | Six Months EndedJanuary 31, |       |   | PercentageGrowth |  
|                    |  | 2009                        |       |   | 2008             |   |      
|Engineering revenue |  | $                           | 9,701 |   |                  | $ | 8,244 |   |  | 17.7  | %
|Gross margin (loss) |  |                             | 218   |   |                  |   | (332  | ) |  | 165.7 | %
|Gross margin %      |  |                             | 2.2   | % |                  |   | -4.0  | % |  |       |  

Engineering revenue increased $1,457, or 17.7%, for the six months ended January 31, 2009 as
compared to the six months ended January 31, 2008. The increase in engineering revenue was due primarily to increases in Security Technology Products and Medical Imaging Products of $557 and $1,200, respectively. The increase in Security
Technology Products was due primarily to engineering revenue on a time and materials project with the TSA to transition the eXaminer XLB from a prototype into a product that can be manufactured. This increase was partially offset by the completion
of a project in the six months ended January 31, 2008, which was accounted for under the completed contract method and had revenue of $2,417 for engineering activities that had been performed primarily in periods prior to the six months ended
January 31, 2008. The increase in Medical Imaging Products was due primarily to an increase in customer funded engineering projects.

The engineering gross loss for the six months ended January 31, 2008 decreased $550 to a gross margin of $218 for the six months ended January 31, 2009. The decrease was due primarily to an increase in gross margin on Security
Technology Product projects as a result of more activity on higher gross margin projects, partially offset by an increase in costs incurred in excess of revenues on certain customer funded Medical Imaging Products projects.

Other Revenue

Other revenue of
$5,175 and $5,815 for the six months ended January 31, 2009 and 2008, respectively, represents revenue from the hotel operations. The decrease was due primarily to lower occupancy.



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Operating Expenses



|                                 |  |                             |        |                       |   |        |  |      |      |  |      |  
|-------------------------------- |  | --------------------------- | ------ | --------------------- | - | ------ |  | ---- | ---- |  | ---- | -
|                                 |  | Six Months EndedJanuary 31, |        | Percentage of Revenue |  
|                                 |  | 2009                        |        | 2008                  |   | 2009   |  |      | 2008 | 
|Research and product development |  | $                           | 23,925 |                       | $ | 23,040 |  | 11.7 | %    |  | 11.9 | %
|Selling and marketing            |  |                             | 19,412 |                       |   | 15,787 |  | 9.5  | %    |  | 8.2  | %
|General and administrative       |  |                             | 20,464 |                       |   | 19,136 |  | 10.0 | %    |  | 9.9  | %
|Restructuring charge             |  |                             | 3,488  |                       |   |       |  | 1.7  | %    |  | 0.0  | %
|                                 |  |                             |        |                       |   |        |  |      |      |  |      |  
|                                 |  | $                           | 67,289 |                       | $ | 57,963 |  | 32.9 | %    |  | 30.0 | %
|                                 |  |                             |        |                       |   |        |  |      |      |  |      |  

Operating expenses increased $9,326 for the six months ended January 31, 2009 from the six
months ended January 31, 2008. The increase was due primarily to the acquisition of Copley in April 2008. During the six months ended January 31, 2009, Copley accounted for operating expenses of $7,975, of which $3,575, $2,587, and $1,813
was for research and product development, selling and marketing, and general and administrative expenses, respectively. Also, contributing to the increase in operating expenses was the restructuring charge of $3,488 during the six months ended
January 31, 2009 for severance and personnel related costs of the restructuring plan implemented by management in January 2009.

Other
items that contributed to the increase in operating expenses in the six months ended January 31, 2009 as compared to the six months ended January 31, 2008 was $688 of contingent professional fees in general and administrative expenses
related to an income tax refund and related interest of $6,459 received from the IRS in December 2008. Partially offsetting this increase in operating expenses was a reduction in research and product development costs on internally funded
engineering projects for Medical Imaging Products due primarily to an increase in customer funded engineering projects.

Other Income

Net interest income was $1,775 for the six months ended January 31, 2009 compared to $5,187 for the six months ended January 31, 2008. The
decrease was due primarily to lower invested cash balances as a result of the acquisition of Copley, the Companys $25,022 Common Stock repurchase in the first and second quarters of fiscal year 2009, and a decline in interest rates.

Net other income was $897 and $860 for the six months ended January 31, 2009 and 2008, respectively. Net other income consisted
predominantly of foreign currency exchange gains incurred by the Companys Canadian subsidiary during the six months ended January 31, 2009. Net other income in the six months ended January 31, 2008 consisted primarily of $555 the
Company received from its insurance company as reimbursement for legal fees incurred in relation to an indemnification matter related to the Companys sale of Camtronics in November 2005. Also contributing to the net other income during the six
months ended January 31, 2008 was foreign currency exchange gains incurred by the Companys Canadian and Danish subsidiaries.

Provision for
Income Taxes

The effective tax rate for the six months ended January 31, 2009 and 2008 was a benefit of 515% and a provision of
33%, respectively. The effective income tax rate is based upon the estimated income for the fiscal year, the composition of the income in different countries, and adjustments, if any, in the applicable quarterly periods for the potential tax
consequences, benefits, resolutions of tax audits or other tax contingencies. For the six months ended January 31, 2009, the effective tax rate benefit of 515% was due primarily to the IRS refund of $6,459 received in December 2008. The refund,
which included $1,065 of interest, was for the carryback of a loss and research and development credits from fiscal year 2004 and from additional research and development tax credits claimed on amended income tax returns for fiscal years 2001
through 2003. The impact of this refund and related interest was a reduction of unrecognized tax benefits by approximately $3,280, of which $1,232 was recorded as a tax benefit in the six months ended January 31, 2009. Also contributing to
the effective tax rate benefit for the six months ended January 31, 2009 were discrete benefits of $391 for previously unrecognized tax benefits resulting from the settlement of the IRS audit, partially offset by additional provisions for
agreed federal and state adjustments. The effective tax rate benefit for the six months ended January 31, 2009 also includes a discrete tax benefit of $404 for the reinstatement of the federal research and experimentation credit back to
January 1, 2008.



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##### Table of Contents

Net Income per Share

Net income and net income per share for the six months ended January 31, 2009 and 2008 were as follows:



|                             |  |                             |       |   |      |   |        |  
|---------------------------- |  | --------------------------- | ----- | - | ---- | - | ------ | -
|                             |  | Six Months EndedJanuary 31, |      
|                             |  | 2009                        |       |   | 2008 |  
|Net income                   |  | $                           | 1,739 |   |      | $ | 13,535 |  
|% of net revenue             |  |                             | 0.9   | % |      |   | 7.0    | %
|Diluted net income per share |  | $                           | 0.13  |   |      | $ | 1.02   |  

Net income was $1,739 for the six months ended January 31, 2009 compared to $13,535 for the
six months ended January 31, 2008. Basic and diluted net income per share were $0.13 for the six months ended January 31, 2009 as compared to basic and diluted net income per share of $1.03 and $1.02, respectively, for the six months ended
January 31, 2008. The decreases in net income as well as basic and diluted net income per share from the six months ended January 31, 2008 to the six months ended January 31, 2009 were due primarily to a decline in gross margin, an
increase in operating expenses, and a decline in interest income, partially offset by a decline in the effective income tax rate.

Liquidity and Capital
Resources

Cash and cash equivalents and marketable securities totaled $147,848 and $186,442 at January 31, 2009 and July 31,
2008, respectively. Working capital was $257,494 and $287,260 at January 31, 2009 and July 31, 2008, respectively. The Companys balance sheet reflected an increase in the current ratio to 5.3 to 1 at January 31, 2009 as compared
to 4.9 to 1 at July 31, 2008, due primarily to a decline in accrued liabilities as a result of the payment of bonuses and voluntary retirement and restructuring costs during the six months ended January 31, 2009.

The Company faces limited exposure to financial market risks, including adverse movements in foreign currency exchange rates and changes in interest
rates. These exposures can change over time as business practices evolve and could have a material adverse impact on the Companys financial results. The Companys primary exposure is related to fluctuations between the U.S. dollar and
local currencies for the Companys subsidiaries in Canada and Europe.

The carrying amounts reflected in the consolidated balance
sheets of cash and cash equivalents, trade receivables, and trade payables approximate fair value at January 31, 2009, due to the short maturities of these instruments.

Cash equivalents totaled $82,148 at January 31, 2009 and consist solely of highly liquid investments with maturities of three months or less from
the time of purchase. Marketable securities having maturities from the time of purchase in excess of three month, which totaled $65,700 at January 31, 2009, are stated at amortized cost, approximating fair value. These marketable securities are
classified as held-to-maturity.

Net cash used for operating activities was $630 for the six months ended January 31, 2009 as compared
to net cash provided by operating activities of $19,387 for the six months ended January 31, 2008. The cash flows used for operating activities in the six months ended January 31, 2009 was due primarily to a net change in operating assets
and liabilities of $15,483 partially offset by net income of $1,739, depreciation and amortization of $8,907, a restructuring charge of $3,488, and share-based compensation expense of $2,698. The net change in operating assets and liabilities was
due primarily to decreases in accrued liabilities and accounts payable of $10,989 and $1,874, respectively, as well as increases in inventories of $6,427. Partially offsetting this net change in operating assets and liabilities was a decrease in
refundable income taxes of $4,002.

The decrease in accrued liabilities of $10,989 was due primarily to the payment of bonuses and
voluntary retirement and restructuring costs during the six months ended January 31, 2009. The decrease in accounts payable of $1,874 was due primarily to the timing of vendor payments. The increase in inventories of $6,427 was due primarily to
an increase in inventories at B-K Medical as a result of the introduction of two new ultrasound product lines, one of which was introduced late in the second quarter and the other of which will be introduced in the third quarter of fiscal year 2009.
The decrease in refundable income taxes of $4,002 was due primarily to the income tax refund of $6,459, which includes interest of $1,065, that was received from the IRS in the second quarter of fiscal year 2009.

Net cash used for investing activities was $60,395 and $60,737 in the six months ended January 31, 2009 and 2008, respectively. The cash used for
investing activities in the six months ended January 31, 2009 was due primarily to the purchase of short-term held-to-maturity marketable securities and capital expenditures of $115,957 and $6,065, respectively, partially offset by the
maturities of $62,787 of short-term held-to-maturity marketable securities.



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##### Table of Contents

Net cash used for financing activities was $27,555 and $737 in the six months ended January 31, 2009
and 2008, respectively. Net cash used for financing activities in the six months ended January 31, 2009 consisted of $25,022 to repurchase shares of Common Stock and $2,656 for dividends paid to stockholders.

The Company believes that its balances of cash and cash equivalents, marketable securities, and cash flows expected to be generated by future operating
activities will be sufficient to meet its cash requirements for at least the next 12 months.

Commitments, Contractual Obligations and Off-Balance Sheet
Arrangements

The Companys contractual obligations at January 31, 2009, and the effect such obligations are expected to have
on liquidity and cash flows in future periods, are as follows:



|                       |  |       |        |                 |   |             |  |                            |       |                  |   |       |  |   |      
|---------------------- |  | ----- | ------ | --------------- | - | ----------- |  | -------------------------- | ----- | ---------------- | - | ----- |  | - | -----
|Contractual Obligation |  | Total |        | Less than1 year |   | 1 - 3 years |  | More than3 years - 5 years |       | More than5 years
|Operating leases       |  | $     | 11,391 |                 | $ | 3,286       |  | $                          | 3,998 |                  | $ | 1,120 |  | $ | 2,987
|Purchasing obligations |  |       | 47,092 |                 |   | 42,611      |  |                            | 4,481 |                  |   |      |  |   |     
|                       |  |       |        |                 |   |             |  |                            |       |                  |   |       |  |   |      
|                       |  | $     | 58,483 |                 | $ | 45,897      |  | $                          | 8,479 |                  | $ | 1,120 |  | $ | 2,987
|                       |  |       |        |                 |   |             |  |                            |       |                  |   |       |  |   |      

As of January 31, 2009, the total liabilities associated with uncertain tax positions under
FIN No. 48 were $7,589. Due to the complexity associated with the Companys tax uncertainties, it cannot make a reasonably reliable estimate of the period in which it expects to settle the non-current liabilities associated with these
uncertain tax positions. Therefore, these amounts have not been included in the contractual obligations table.

The Company currently has
approximately $22,500 in revolving credit facilities with various banks available for direct borrowings. The Companys revolving credit facility agreement contains a number of covenants, including a covenant requiring the Company to maintain a
tangible net worth (as defined in the revolving credit facility agreement) of no less than $255,000 as of the end of any fiscal quarter. The Company was in compliance with this covenant at January 31, 2009 with a tangible net worth of
approximately $340,400. As of January 31, 2009, there were no direct borrowings or off-balance sheet arrangements.

Critical Accounting Policies
and Estimates

This discussion and analysis of the Companys financial condition and results of operations is based on the
Companys consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Companys most critical accounting policies have a
significant impact on the preparation of these consolidated financial statements. These policies include estimates and significant judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of
contingent assets and liabilities. The Company continues to have the same critical accounting policies and estimates as are described in Item 7, beginning on page 32, in the Companys Annual Report on Form 10-K for the fiscal year ended
July 31, 2008 filed with the United States Securities and Exchange Commission (the SEC) on September 29, 2008. Those policies and estimates relate to revenue recognition and accounts receivable; share-based compensation;
inventories; concentration of credit risk; warranty reserve; investment in and advances to affiliated companies; business combinations; intangible assets and other long-lived assets; and income taxes. The Company continues to evaluate its estimates
and judgments on an on-going basis. By their nature, these estimates and judgments require management to make its most difficult and subjective judgments, often as a result of the need to make estimates on matters that are inherently uncertain. In
the case of the Companys critical accounting policies, these estimates and judgments are based on its historical experience, terms of existing contracts, the Companys observance of trends in the industry, information provided by its
customers, and information available from other outside sources, as appropriate.

Recent Accounting Pronouncements

The Company adopted SFAS No. 157, Fair Value Measurements, on August 1, 2008. SFAS No. 157 defines fair value,
establishes a methodology for measuring fair value and expands the required disclosure for fair value measurements. During calendar year 2008, the FASB issued the following amendments to SFAS No. 157:



| |  |  | FASB Staff Position (FSP) No. FAS 157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13, amends SFAS No. 157 to remove certain leasing transactions from its scope.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | FSP No. FAS 157-2, Effective Date of FASB Statement No. 157, delays the effective date of SFAS No. 157 from fiscal year 2008 to the
fiscal year ending July 31, 2010 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company is
currently evaluating the potential impact of SFAS No. 157 for non-financial assets and non-financial liabilities on its financial position and results of operations.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | FSP No. FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, clarifies the application
of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP No. FAS 157-3 was
effective upon issuance on October 10, 2008, including for prior periods for which financial statements have not been issued.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Company adopted FSP No. FAS 157-1 and FSP No. FAS 157-3 in the first quarter of fiscal year 2009 concurrent with the adoption of SFAS No. 157. The adoption of SFAS No. 157 as amended did not have an impact on the Companys financial
position or results of operations. See Note 4 to the Consolidated Financial Statements for additional SFAS No. 157 disclosures.

In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-including an amendment of SFAS No. 115. The new statement allows entities to choose, at specified election
dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that items fair value in
subsequent reporting periods must be recognized in current earnings. The Company adopted SFAS No. 159 on August 1, 2008 concurrent with its adoption of SFAS No. 157. The adoption of SFAS No. 159 did not have an impact on the
Companys financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations. SFAS No. 141(R) requires the acquiring entity in a business combination to record all assets acquired and liabilities assumed at their respective acquisition date fair values, changes the recognition of assets acquired
and liabilities assumed arising from contingencies, changes the recognition and measurement of contingent consideration, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141(R) also requires additional disclosure of
information surrounding a business combination, such that users of the entitys financial statements can fully understand the nature and financial impact of the business combination. SFAS No. 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, which will be the Companys fiscal year ending July 31, 2010. An entity may not
apply it before that date. The provisions of SFAS No. 141(R) will only impact the Company if the Company is a party to a business combination after July 31, 2009.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of
Accounting Research Bulletin No. 51. SFAS No. 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to
the parent and to the noncontrolling interest, changes in a parents ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure
requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. This statement is effective for the Company beginning on August 1, 2009. The Company is currently evaluating
the potential impact of the adoption of SFAS No. 160 on its consolidated financial position, results of operations, and cash flows.

In April 2008, the FASB issued FSP No. FAS 142-3, Determining the Useful Life of Intangible Assets. FSP No. FAS 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in
determining the useful lives of recognized intangible assets. FSP No. FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The Company does not believe the adoption of FSP No. FAS 142-3 will have a material impact on its
consolidated results of operations, financial position, or cash flows.



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##### Table of Contents

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles, which will provide a framework for selecting accounting principles to be used in preparing financial statements that are presented in conformity with GAAP for nongovernmental entities. Prior to the issuance of SFAS
No. 162, the GAAP hierarchy was defined in the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. With the issuance of SFAS No. 162, the GAAP hierarchy for nongovernmental entities will move from auditing literature to accounting literature. SFAS No. 162 became effective 60 days following the SECs approval
on September 16, 2008 of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. This statement became
effective during the second quarter of fiscal year 2009 and did not have an impact on the Companys financial position or results of operations.

In June 2008, the FASB issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, which classifies unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) as participating securities and requires them to be included in the computation of earnings per share pursuant to the two-class method
described in SFAS No. 128, Earnings per Share. This FSP is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. All prior-period earnings
per share data presented are to be adjusted retrospectively (including interim financial statements, summaries of earnings, and selected financial data) to conform with the provisions of this FSP, with early application not permitted. The Company is
currently evaluating the effect, if any, that the adoption of FSP No. EITF 03-6-1 will have on its financial position, results of operations and cash flows.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

All dollar amounts in this Item 3 are in thousands.

The Company places its cash investments in
highcredit-quality financial instruments and, by policy, limits the amount of credit exposure to any one financial institution. The Company faces limited exposure to financial market risks, including adverse movements in foreign currency
exchange rates and changes in interest rates. These exposures may change over time as business practices evolve and could have a material adverse impact on the Companys financial results. The Companys primary exposure is related to
fluctuations between the U.S. dollar and local currencies for the Companys subsidiaries in Canada and Europe.

The Companys
cash and investments include cash equivalents, which the Company considers to be investments purchased with original maturities of three months or less. Investments having original maturities in excess of three months are stated at fair value, and
are classified as held-to-maturity. Total interest income for the three months ended January 31, 2009 was $767. An interest rate change of 10% would not have a material impact on the fair value of the Companys investment portfolio or on
future earnings.



|Item 4. | Controls and Procedures
|------- | -----------------------

The Companys management, with the participation of the Companys principal executive officer and principal financial officer, evaluated the effectiveness of the Companys disclosure controls and procedures as of
January 31, 2009. The term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information
required to be disclosed by the company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the
companys management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions to be made regarding required disclosure. It should be noted that any system of controls and procedures,
however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met and that management necessarily applies its judgment in evaluating the cost-benefit relationship of possible
controls and procedures. Based on the evaluation of the Companys disclosure controls and procedures as of January 31, 2009, the Companys principal executive officer and principal financial officer concluded that, as of such date,
the Companys disclosure controls and procedures were effective at the reasonable assurance level.

There were no changes to the
Companys internal control over financial reporting during the quarter ended January 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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Part II. OTHER INFORMATION



|Item 1A. | Risk Factors
|-------- | ------------

You should
carefully consider the risks described below before making an investment decision with respect to the Companys Common Stock. Additional risks not presently known to the Company, or that the Company currently deems immaterial, may also impair
the Companys business. Any of these could have a material and negative effect on the Companys business, financial condition, or results of operations.

Because a significant portion of the Companys revenue currently comes from a small number of customers, any decrease in revenue from these customers could harm the Companys operating results.

The Company depends on a small number of customers for a large portion of its business, and changes in its customers orders may
have a significant impact on the Companys operating results. If a major customer significantly reduces the amount of business it does with the Company, there would be an adverse impact on its operating results.

The Company had three customers, as set forth in the table below, which individually accounted for 10% or more of the Companys net product and
engineering revenue during either the three or six months ended January 31, 2009 or 2008.



|                   |  |                               |     |  |                             |     |  |      |     |  |      |    
|------------------ |  | ----------------------------- | --- |  | --------------------------- | --- |  | ---- | --- |  | ---- | ---
|                   |  | Three Months EndedJanuary 31, |     |  | Six Months EndedJanuary 31, |    
|                   |  | 2009                          |     |  | 2008                        |     |  | 2009 |     |  | 2008 |    
|Philips            |  | 14                            | %   |  |                             | (*) |  | 16   | %   |  |      | (*)
|Toshiba            |  | 18                            | %   |  | 19                          | %   |  | 15   | %   |  | 19   | %  
|L-3 Communications |  |                               | (*) |  | 13                          | %   |  |      | (*) |  | 12   | %  

Note (*): Total product and engineering revenues were less than 10% in this period.

The Companys top ten customers combined for approximately 68% and 67% of the Companys total product and engineering revenue for the three
months ended January 31, 2009 and 2008, respectively, and 69% and 68% for the six months ended January 31, 2009 and 2008, respectively. Philips and Toshiba also accounted for 16% and 12%, respectively, of net accounts receivable at
January 31, 2009.

Although the Company is seeking to broaden its customer base, it will continue to depend on sales to a relatively
small number of major customers. Because it often takes significant time to replace lost business, it is likely that the Companys operating results would be adversely affected if one or more of the Companys major customers were to
cancel, delay, or reduce significant orders in the future. The Companys customer agreements typically permit the customer to discontinue future purchases after timely notice.

In addition, the Company generates significant accounts receivable in connection with the products the Company sells and the services it provides to its
major customers. Although the Companys major customers are large corporations, if one or more of its customers were to become insolvent or otherwise be unable to pay for the Companys products and services, the Companys operating
results and financial condition could be adversely affected.

Competition from existing or new companies in the medical and security
imaging technology industry could cause the Company to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.

The Company operates in a highly competitive industry. The Company is subject to competition based on product design, performance, pricing, quality, and
service offerings, and management believes the Companys innovative engineering and product reliability have been important factors in its growth. While the Company tries to maintain competitive pricing on those products which are directly
comparable to products manufactured by others, in many instances the Companys products will conform to more exacting specifications and carry a higher price than analogous products manufactured by others.

The Companys competitors include divisions of larger, more diversified organizations as well as specialized companies. Some of them have greater
resources and larger staffs than the Company has. Many of the Companys existing and potential OEM customers have the ability to design and manufacture internally the products that the Company manufactures for them. The Company faces
competition from the research and product development groups and manufacturing operations of its existing and potential customers, who continually compare the benefits of internal research, product development, and manufacturing with the costs and
benefits of outsourcing.



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The Company depends on its suppliers, some of which are the sole source for certain components, and
its production could be substantially curtailed if these suppliers were not able to meet the Companys demands and alternative sources were not available.

The Company orders raw materials and components to complete its customers orders, and some of these raw materials and components are ordered from sole-source suppliers. Although the Company works with its
customers and suppliers to minimize the impact of shortages in raw materials and components, the Company sometimes experiences short-term adverse effects due to price fluctuations and delayed shipments. In the past, there have been industry-wide
shortages of electronics components. If a significant shortage of raw materials or components were to occur, the Company might have to delay shipments or pay premium pricing, which could adversely affect its operating results. In some cases, supply
shortages of particular components could substantially curtail the Companys production of products using these components. The Company is not always able to pass on price increases to its customers. Accordingly, some raw material and component
price increases could adversely affect its operating results. The Company also depends on a small number of suppliers to provide many of the other raw materials and components that it uses in its business. Some of these suppliers are affiliated with
customers or competitors, and others are small companies. If the Company were unable to continue to purchase these raw materials and components from its suppliers, its operating results could be adversely affected. Because many of the Companys
costs are fixed, its margins depend on the volume of output at its facilities, and a reduction in volume could adversely affect its margins.

The Company relies on successful performance by and relationships with subcontractors, which reliance could have a material adverse effect on its results of operations and financial condition.

The Company has formed arrangements with subcontractors for various services and components. The Company has formed such arrangements because it is
commercially more efficient to outsource such services and purchase such components than it would be for it to perform or manufacture such services and components, which in some cases require, among other things, a high degree of technical skill and
advanced equipment that is not practical or cost-effective for it to develop or acquire. As a result, if one of the Companys subcontractors were to experience quality problems, capacity constraints, decreased yields, or delivery delays, or
were to raise prices significantly, the Company could face product liability claims, product shortages, decreased revenues or lost customers, which could adversely affect its operating results.

If the Company were to be left with excess inventory, its operating results could be adversely affected.

Because of long lead times and specialized product designs, in certain cases the Company purchases components and manufactures products in anticipation
of customer orders based on customer forecasts. For a variety of reasons, such as decreased end-user demand for the Companys products, its customers might not purchase all of the products that it has manufactured or for which it has purchased
components. In either event, the Company would attempt to recoup material and manufacturing costs by means such as returning components to its vendors, disposing of excess inventory through other channels, or requiring its OEM customers to purchase
or otherwise compensate it for such excess inventory. Some of the Companys significant customer agreements do not give it the ability to require its OEM customers to do this. To the extent that the Company was unsuccessful in recouping its
material and manufacturing costs, its net sales and operating results could be adversely affected. Moreover, carrying excess inventory would reduce the working capital the Company has available to continue to operate and grow its business.

Uncertainties and adverse trends affecting the Companys industry or any of its major customers could adversely affect its
operating results.

The Companys business operates primarily within two major markets within the electronics industry, Medical
Technology Products and Security Technology Products, which are subject to rapid technological change, pricing, and margin pressure. These markets have historically been cyclical and subject to significant downturns characterized by diminished
product demand, rapid declines in average selling prices, and production over-capacity. In addition, changes in government policy relating to reimbursement for the purchase and use of medical and security-related capital equipment could also affect
the Companys sales. The Companys customers markets are also subject to economic cycles and are likely to experience recessionary periods in the future. The economic conditions affecting the Companys industry in general or any
of its major customers in particular, might adversely affect its operating results. The Companys other businesses are subject to the same or greater technological and cyclical pressures.

Over the last nine months, the Companys Medical Technology Products OEM customers have been impacted by the DRA, which reduced government
reimbursement rates for doctors utilizing medical imaging procedures for their patients. In addition, the deterioration of global economic conditions over the last six months has resulted in reduced endowments and funding of hospitals and clinics.
In response, these end users have begun to reduce the capital available for investment in new facilities, expansions or upgrades. As such, Medical Technology Products OEM customers have experienced reductions in demand for their products and have in
turn reduced their procurement spending.



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The Security Technology Products operating results could be negatively impacted by a reduction in the
level of government funding, delays in the expansion of airport terminals, and decreases in airline passenger volume.

The
Companys customers delay or inability to obtain any necessary United States or foreign regulatory clearances or approvals for their products could have a material adverse effect on the Companys business.

The Companys products are used by a number of its customers in the production of medical devices that are subject to a high level of regulatory
oversight. A delay in obtaining or inability to obtain any necessary United States or foreign regulatory clearances or approvals for products could have a material adverse effect on the Companys business. The process of obtaining clearances
and approvals can be costly and time-consuming. There is a further risk that any approvals or clearances, once obtained, might be withdrawn or modified. Medical devices cannot be marketed in the United States without clearance from the United States
Food and Drug Administration (FDA). Medical devices sold in the United States must also be manufactured in compliance with FDA rules and regulations, which regulate the design, manufacturing, packing, storage, and installation of medical
devices. Moreover, medical devices are required to comply with FDA regulations relating to investigational research and labeling. States may also regulate the manufacturing, sale, and use of medical devices. Medical devices are also subject to
approval and regulation by foreign regulatory and safety agencies.

The Companys business strategy involves the pursuit of
acquisitions or business combinations, which, if consummated, could be difficult to integrate, disrupt the Companys business, dilute stockholder value, or divert management attention.

As part of the Companys business strategy, the Company might consummate acquisitions or business combinations. Acquisitions are typically
accompanied by a number of risks, including the difficulty of integrating the operations and personnel of the acquired companies, the potential disruption of the Companys ongoing business and distraction of management, expenses related to the
acquisition, and potential unknown liabilities associated with acquired businesses. If the Company does not successfully complete acquisitions that it pursues in the future, it could incur substantial expenses and devote significant management time
and resources without generating any benefit to the Company. In addition, substantial portions of the Companys available cash might be utilized as consideration for these acquisitions.

The Companys annual and quarterly operating results are subject to fluctuations, which could affect the market price of its Common Stock.

The Companys annual and quarterly results may vary significantly depending on various factors, many of which are beyond the
Companys control, and may not meet the expectations of securities analysts or investors. If this occurs, the price of the Companys Common Stock could decline. These factors include:



| |  |  | variations in the timing and volume of customer orders relative to the Companys manufacturing capacity;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | introduction and market acceptance of the Companys customers new products;
| | - |  | ----------------------------------------------------------------------------



| |  |  | changes in demand for the Companys customers existing products;
| | - |  | -----------------------------------------------------------------



| |  |  | the timing of the Companys expenditures in anticipation of future orders;
| | - |  | --------------------------------------------------------------------------



| |  |  | effectiveness in managing the Companys manufacturing processes;
| | - |  | ----------------------------------------------------------------



| |  |  | changes in competitive and economic conditions generally or in the Companys customers markets;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | changes in the cost or availability of components or skilled labor;
| | - |  | -------------------------------------------------------------------



| |  |  | changes in the Companys effective tax rate;
| | - |  | --------------------------------------------



| |  |  | fluctuations in manufacturing yields;
| | - |  | -------------------------------------



| |  |  | foreign currency exposure; and
| | - |  | ------------------------------



| |  |  | investor and analyst perceptions of events affecting the Company, its competitors, and/or its industry.
| | - |  | -------------------------------------------------------------------------------------------------------

A delay in anticipated sales could result in the deferral of the associated revenue beyond the end of a particular quarter, which would have a
significant effect on the Companys operating results for that quarter. In addition, most of the Companys operating expenses do not vary directly with net revenues and are difficult to adjust in the short term. As a result, if revenues
for a particular quarter were below the Companys expectations, the Company could not proportionately reduce operating expenses for that quarter. Hence, the revenue shortfall could have a disproportionate adverse effect on its operating results
for that quarter.



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Loss of any of the Companys key personnel could hurt its business because of their industry
experience and their technological expertise.

The Company operates in a highly competitive industry and depends on the services of its
key senior executives and its technological experts. The loss of the services of one or several of its key employees or an inability to attract, train, and retain qualified and skilled employees, specifically engineering and operations personnel,
could result in the loss of customers or otherwise inhibit the Companys ability to operate and grow its business successfully.

If
the Company is unable to maintain its expertise in research and product development, manufacturing processes, and marketing new products, it will not be able to compete successfully.

The Company believes that its future success depends upon its ability to provide research and product development, provide manufacturing services that
meet the changing needs of its customers, and market new products. This requires that the Company successfully anticipate and respond to technological changes in design and manufacturing processes in a cost-effective and timely manner. As a result,
the Company continually evaluates the advantages and feasibility of new product designs, and manufacturing processes. Further, there can be no assurance that the Company will be able to develop and introduce new and improved products in a timely or
efficient manner or that new and improved products, if developed, will achieve market acceptance.

The September 11, 2001 terrorist
attacks and the creation of the U.S. Department of Homeland Security have increased financial expectations that may not materialize.

The September 11, 2001 terrorist attacks and the subsequent creation of the U.S. Department of Homeland Security have created increased interest in the Companys security and inspection systems. However, the level of demand for
the Companys products is not predictable and may vary over time. The Company does not know what solutions will continue to be adopted by the U.S. Department of Homeland Security as a result of terrorism and whether its products will continue
to be a part of the solution. Additionally, should the Companys products be considered as a part of the future security solution, it is unclear what the level of purchases may be and how quickly funding to purchase the Companys products
may be made available. These factors may adversely impact the Company and create unpredictability in revenues and operating results.

The Company is exposed to risks associated with international operations and markets.

The Company markets and sells
products in international markets, and has established offices and subsidiaries in Denmark, Germany, Italy, and Canada. Revenues from international operations accounted for 20% and 22% of total revenues for the three months ended January 31,
2009 and 2008, respectively, and 19% and 20% for the six months ended January 31, 2009 and 2008, respectively. From its U.S. operations, the Company also ships directly to customers in Europe and Asia, for which shipments accounted for 45% and
32% of total revenues for the three months ended January 31, 2009 and 2008, respectively, and 43% and 30% for the six months ended January 31, 2009 and 2008, respectively. There are inherent risks in transacting business internationally,
including:



| |  |  | changes in applicable laws and regulatory requirements;
| | - |  | -------------------------------------------------------



| |  |  | export and import restrictions;
| | - |  | -------------------------------



| |  |  | export controls relating to technology;
| | - |  | ---------------------------------------



| |  |  | tariffs and other trade barriers;
| | - |  | ---------------------------------



| |  |  | intellectual property laws that offer less protection for the Companys proprietary rights;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | difficulties in staffing and managing foreign operations;
| | - |  | ---------------------------------------------------------



| |  |  | longer payment cycles;
| | - |  | ----------------------



| |  |  | problems in collecting accounts receivable;
| | - |  | -------------------------------------------



| |  |  | political instability;
| | - |  | ----------------------



| |  |  | fluctuations in currency exchange rates;
| | - |  | ----------------------------------------



| |  |  | expatriation controls; and
| | - |  | --------------------------



| |  |  | potential adverse tax consequences.
| | - |  | -----------------------------------

There can be no assurance that one or more of these factors will not have a material adverse effect on the Companys future international activities and, consequently, on its business and results of operations.



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If the Company becomes subject to intellectual property infringement claims, it could incur
significant expenses and could be prevented from selling specific products.

The Company may become subject to claims that it infringes
the intellectual property rights of others in the future. The Company cannot ensure that, if made, these claims will not be successful. Any claim of infringement could cause the Company to incur substantial costs defending against the claim even if
the claim is invalid, and could distract management from other business. Any judgment against the Company could require substantial payment in damages and could also include an injunction or other court order that could prevent the Company from
offering certain products.

If operators of the Companys security and inspection systems fail to detect weapons, explosives or
other devices that are used to commit a terrorist act, the Company could be exposed to product liability and related claims for which it may not have adequate insurance coverage.

The Companys business exposes it to potential product liability risks that are inherent in the development, manufacturing, sale and service of
security inspection systems. The Companys customers use its security and inspection systems to help them detect items that could be used in performing terrorist acts or other crimes. The training, reliability and competence of the
customers operators are crucial to the detection of suspicious items. In addition, the Companys security and inspection systems are not designed to work under all circumstances. The Company tests the reliability of its security and
inspection systems during both their development and manufacturing phases. The Company also performs such tests if it is requested to perform installation, warranty or post-warranty servicing. However, the Companys security inspection systems
are advanced mechanical and electronic devices and therefore can malfunction.

As a result of the September 11, 2001, and 1993 World
Trade Center bombing attacks, and the potential for future attacks, product liability insurance coverage for such threats is extremely difficult and costly to obtain. It is possible, subject to the applicability of the Support Anti-terrorism by
Fostering Effective Technologies Act of 2002 (the SAFETY Act), that if the Company was found to liable following a major act of terrorism, its insurance coverage might not fully cover the claims for damages.

The SAFETY Act is a federal law enacted to provide certain legal liability protections for providers of certain anti-terrorism technologies. If
applicable to claims against Analogic, the SAFETY Act could mitigate some of this risk.

The Companys security and inspections
systems business depends in part on purchases of products and services by the U.S. federal government and its agencies, which purchases may be only partially funded, and are subject to potential termination and reductions and delays in government
spending.

Sales of the Companys security and inspection systems, in some cases as an indirect subcontractor or team member with
prime contractors and in some cases directly, to the U.S. Government and its agencies accounted for approximately 11% and 13% of the Companys total product and engineering revenues in the three months ended January 31, 2009 and 2008,
respectively, and approximately 12% and 14% in the six months ended January 31, 2009 and 2008, respectively. The Companys security and inspection systems are included in many different domestic programs. Over the lifetime of a program,
the award of many different individual contracts and subcontracts could impact the Companys products requirements. The funding of U.S. Government programs is subject to Congressional appropriations. Although multiple-year contracts may
be planned in connection with major procurements, Congress generally appropriates funds only on a single fiscal year basis. Consequently, programs are often only partially funded initially, and additional funds are committed only as Congress makes
further appropriations and prime contracts receive such funding. The reduction or delay in funding or termination of a government program in which the Company is involved could result in a loss of or delay in receiving anticipated future revenues
attributable to that program and contracts or orders received. The U.S. Government could reduce or terminate a prime contract under which the Company is a subcontractor or team member irrespective of the quality of our products or services. The
termination of a program or delays in the reduction in or failure to commit additional funds to a program in which the Company is involved could negatively impact its revenues and have a material adverse effect on the Companys financial
condition and results of operations.



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##### Table of Contents

|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

The following table contains information about purchases by the Company of its equity securities during the three months ended January 31, 2009.



|                 |  |                                |       |  |                                 |       |                                                                              |         |                                                                                                        |   |           
|---------------- |  | ------------------------------ | ----- |  | ------------------------------- | ----- | ---------------------------------------------------------------------------- | ------- | ------------------------------------------------------------------------------------------------------ | - | ----------
|Period           |  | Total Numberof SharesPurchased |       |  | Average Price Paidper Share (2) |       | Total Number ofShares Purchasedas Part of PubliclyAnnounced Plans orPrograms |         | Maximum Number(or ApproximateDollar Value) ofShares that MayYet Be PurchasedUnder the
Plans orPrograms
|11/1/08-11/30/08 |  | 215,295                        | (1,3) |  | $                               | 37.85 |                                                                              | 211,905 |                                                                                                        | $ | 13,493,746
|12/1/08-12/31/08 |  | 436,665                        | (1,3) |  |                                 | 31.00 |                                                                              | 436,115 |                                                                                                        |   |          
|1/1/09-1/31/09   |  | 470                            | (1)   |  |                                 | 28.16 |                                                                              |        |                                                                                                        |   |          
|                 |  |                                |       |  |                                 |       |                                                                              |         |                                                                                                        |   |           
|Total            |  | 652,430                        |       |  | $                               | 33.26 |                                                                              | 648,020 |                                                                                                        | $ |          
|                 |  |                                |       |  |                                 |       |                                                                              |         |                                                                                                        |   |           



|(1) | Includes shares of 3,390, 550, and 470 surrendered by employees in order to meet tax withholding obligations in connection with the vesting of restricted stock awards in November
2008, December 2008, and January 2009, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | For purposes of determining the number of shares to be surrendered as described in Note 1, the price per share deemed to be paid was the closing price of the Companys Common
Stock on the NASDAQ Global Select Market on the vesting date or purchase date.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Includes shares of 211,905 and 436,115 purchased in open-market transactions in November 2008 and December 2008, respectively. These shares were purchased pursuant to a repurchase
program authorized by the Board that was announced on October 13, 2008 to repurchase up to $25.0 million of the Companys Common Stock. The Company completed the repurchase program, which was funded using the Companys available cash,
in December 2008. During the second quarter of fiscal year 2009, the Company repurchased 648,020 shares of Common Stock under this repurchase program for $21.5 million at an average purchase price of $33.21 per share.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

On January 26, 2009, the Company held its 2009 Annual Meeting of Stockholders (the Meeting). At the Meeting, the votes on the matters presented to the Companys stockholders were as follows:

(1) To elect two Class II directors for a one year term, to hold office until the 2010 Annual Meeting of Stockholders and until their
respective successors have been duly elected and qualified:



|                 |  |            |  |               
|---------------- |  | ---------- |  | --------------
|                 |  | Votes For  |  | Votes Withheld
|James J. Judge   |  | 10,890,181 |  | 1,514,563     
|Gerald L. Wilson |  | 11,054,880 |  | 1,349,864     

The remaining terms of M. Ross Brown, Bernard M. Gordon, James W. Green, Michael T. Modic, Fred B.
Parks, Sophie V. Vandebroek, and Edward F. Voboril continued after the meeting.

(2) To amend the Companys Articles of Organization
and By-Laws to implement majority voting in connection with the election of directors:



|           |  |               |  |               |  |                 
|---------- |  | ------------- |  | ------------- |  | ----------------
|Votes For  |  | Votes Against |  | Votes Abstain |  | Broker Non Votes
|11,222,287 |  | 442,091       |  | 7,147         |  | 733,225         

(3) To ratify the appointment of PricewaterhouseCoopers LLP as the Companys independent
registered public accounting firm for the fiscal year ending July 31, 2009:



|           |  |               |  |               |  |                 
|---------- |  | ------------- |  | ------------- |  | ----------------
|Votes For  |  | Votes Against |  | Votes Abstain |  | Broker Non Votes
|11,752,169 |  | 649,927       |  | 2,654         |  | 0               

Please see the Companys Proxy Statement filed with the SEC on November 28, 2008 in
connection with the Meeting for a complete description of the matters voted upon.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|        |  |                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                              
|        | 
|10.1    |  | Change of Control Agreement Dated December 24, 2008 Between Analogic Corporation and John J. Millerick                                   
|        | 
|10.2    |  | Amendment Dated December 24, 2008 to Letter Agreement Between Analogic Corporation and James W. Green Dated April 20, 2007               
|        | 
|10.3    |  | Amendment Dated December 24, 2008 to Letter Agreement Between Analogic Corporation and John J. Fry Dated October 29, 2007                
|        | 
|10.4    |  | Analogic Corporation Severance Plan For Management Employees, As Amended and Restated, Effective As Of December 31, 2008                 
|        | 
|31.1    |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|        | 
|31.2    |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|        | 
|32.1    |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(b)/Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended
|        | 
|32.2    |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(b)/Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                    |  |  |  |                                      
|------------------- |  |  |  | -------------------------------------
|                    |  |  |  | ANALOGIC CORPORATION                 
|                    |  | 
|Date: March 6, 2009 |  |  |  | /s/ James W. Green                   
|                    |  |  |  | James W. Green                       
|                    |  |  |  | President and                        
|                    |  |  |  | Chief Executive Officer              
|                    |  |  |  | (Principal Executive Officer)        
|                    |  | 
|Date: March 6, 2009 |  |  |  | /s/ John J. Millerick                
|                    |  |  |  | John J. Millerick                    
|                    |  |  |  | Senior Vice President,               
|                    |  |  |  | Chief Financial Officer and Treasurer
|                    |  |  |  | (Principal Financial Officer)        



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##### Table of Contents

EXHIBIT INDEX



|        |  |                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  | Description                                                                                                                              
|        | 
|10.1    |  | Change of Control Agreement Dated December 24, 2008 Between Analogic Corporation and John J. Millerick                                   
|        | 
|10.2    |  | Amendment Dated December 24, 2008 to Letter Agreement Between Analogic Corporation and James W. Green Dated April 20, 2007               
|        | 
|10.3    |  | Amendment Dated December 24, 2008 to Letter Agreement Between Analogic Corporation and John J. Fry Dated October 29, 2007                
|        | 
|10.4    |  | Analogic Corporation Severance Plan For Management Employees, As Amended and Restated, Effective As Of December 31, 2008                 
|        | 
|31.1    |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|        | 
|31.2    |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
|        | 
|32.1    |  | Certification of Principal Executive Officer pursuant to Rule 13a-14(b)/Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended
|        | 
|32.2    |  | Certification of Principal Financial Officer pursuant to Rule 13a-14(b)/Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended



41