##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





Form 10-K


ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
| 
|  |  | For the fiscal year ended: July 31, 2005                                                    
| 
|o |  | 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) 977-3000


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, $.05 par value


(Title of Class)


þ o


þ


þ o


o þ






DOCUMENTS INCORPORATED BY REFERENCE:


NONE










---

TABLE OF CONTENTS



|                                                        |                                                                                                         |  |  |  |  |  |  | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                 
|                                                        | Item 1. Business                                                                                       
|                                                        | Item 2. Properties                                                                                     
|                                                        | Item 3. Legal Proceedings                                                                              
|                                                        | Item 4. Submission of Matters to a Vote of Security Holders                                            
|PART II                                                
|                                                        | Item 5. Market for the Registrants Common Equity and Related Stockholder Matters                      
|                                                        | Item 6. Selected Financial Data                                                                        
|                                                        | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations          
|                                                        | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                                    
|                                                        | Item 8. Financial Statements and Supplementary Data                                                    
|                                                        | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           
|                                                        | Item 9A. Controls and Procedures                                                                       
|                                                        | Item 9B. Other Information                                                                             
|PART III                                               
|                                                        | Item 10. Directors and Executive Officers of the Registrant                                            
|                                                        | Item 11. Executive Compensation                                                                        
|                                                        | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|                                                        | Item 13. Certain Relationships and Related Transactions                                                
|                                                        | Item 14. Principal Accountant Fees and Services                                                        
|PART IV                                                
|                                                        | Item 15. Exhibits and Financial Statement Schedules                                                    
|SIGNATURES                                             
|REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|EX-21 LIST OF SUBSIDIARIES                             
|EX-23 CONSENT OF PRICEWATERHOUSECOOPERS LLP            
|EX-31.1 SECTION 302 CERTIFICATION OF C.E.O.            
|EX-31.2 SECTION 302 CERTIFICATION OF C.F.O.            
|EX-32.1 SECTION 906 CERTIFICATION C.E.O.               
|EX-32.2 SECTION 906 CERTIFICATION C.F.O.               



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PART I







|        |         
|------- | --------
|Item 1. | Business



| |                                
| | -------------------------------
| | Developments During Fiscal 2005













| |                                              
| | ---------------------------------------------
| | Financial Information about Industry Segments



2



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| |                        
| | -----------------------
| | Description of Business









Medical Technology Products.










3



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tm












Security Technology Products. tm


tm


Corporate and Other.


4



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Marketing and Distribution




Sources of Raw Materials and Components




Patents and Licenses








5



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Seasonal Aspect of Business




Working Capital Matters




Material Customers




Backlog




Government Contracts




Competition








Research and Product Development




6



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Environment




Employees




Financial Information about Foreign and Domestic Operations
and Export Revenue








Available Information


www.analogic.com.









|        |           
|------- | ----------
|Item 2. | Properties

1 2


7



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|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings








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



8



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PART II







|        |                                                                              
|------- | -----------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity and Related
    Stockholder Matters



|            |                |      |   |       |     |  |   |       | 
|----------- | -------------- | ---- | - | ----- | --- |  | - | ----- | 
|Fiscal Year |                | High |   |       | Low | 
|            |                |      |   |       |     | 
|2005        |                |      |   |       |     |  |   |      
|            | First Quarter  |      | $ | 45.02 |     |  | $ | 39.26 | 
|            | Second Quarter |      |   | 46.71 |     |  |   | 40.25 | 
|            | Third Quarter  |      |   | 44.67 |     |  |   | 40.25 | 
|            | Fourth Quarter |      |   | 51.96 |     |  |   | 40.95 | 
|2004        |                |      |   |       |     |  |   |      
|            | First Quarter  |      | $ | 52.50 |     |  | $ | 42.50 | 
|            | Second Quarter |      |   | 44.36 |     |  |   | 37.60 | 
|            | Third Quarter  |      |   | 50.15 |     |  |   | 39.41 | 
|            | Fourth Quarter |      |   | 48.98 |     |  |   | 36.20 | 







9



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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

|                                                  |         |                                       |         |        |      |   |         |        |  |   |         |        |  |      |         |        |  |   |         |        | 
|------------------------------------------------- | ------- | ------------------------------------- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ |  | ---- | ------- | ------ |  | - | ------- | ------ | 
|                                                  |         | Year Ended July 31,                   |        
|                                                  |         |                                       |        
|                                                  |         | 2005                                  |         |        | 2004 |   |         | 2003   |  |   | 2002    |        |  | 2001 |        
|                                                  |         |                                       |         |        |      |   |         |        |  |   |         |        |  |      |        
|                                                  |         | (In thousands, except per share data) |        
|Total net revenue                                 |         | $                                     | 364,571 |        |      | $ | 355,557 |        |  | $ | 471,697 |        |  | $    | 304,858 |        |  | $ | 352,139 |       
|Total cost of sales(A)                            |         |                                       | 224,548 |        |      |   | 214,270 |        |  |   | 275,929 |        |  |      | 206,321 |        |  |   | 234,269 |       
|Gross margin                                      |         |                                       | 140,023 |        |      |   | 141,287 |        |  |   | 195,768 |        |  |      | 98,537  |        |  |   | 117,870 |       
|Income (loss) from operations(B)                  |         |                                       | (6,017  | )      |      |   | 6,389   |        |  |   | 70,832  |        |  |      | (1,385  | )      |  |   | 12,873  |       
|Net income(C)                                     |         |                                       | 28,862  |        |      |   | 8,354   |        |  |   | 49,531  |        |  |      | 2,655   |        |  |   | 13,588  |       
|Net income per common share:                      |         |                                       |         |        |      |   |         |        |  |   |         |        |  |      |         |        |  |   |         |       
|                                                  | Basic   |                                       | $       | 2.13   |      |   | $       | 0.62   |  |   | $       | 3.74   |  |      | $       | 0.20   |  |   | $       | 1.05   | 
|                                                  | Diluted |                                       |         | 2.12   |      |   |         | 0.62   |  |   |         | 3.70   |  |      |         | 0.20   |  |   |         | 1.04   | 
|Cash dividends declared per common share          |         | $                                     | 0.32    |        |      | $ | 0.32    |        |  | $ | 0.32    |        |  | $    | 0.29    |        |  | $ | 0.28    |       
|Weighted-average shares:                          |         |                                       |         |        |      |   |         |        |  |   |         |        |  |      |         |        |  |   |         |       
|                                                  | Basic   |                                       |         | 13,566 |      |   |         | 13,463 |  |   |         | 13,251 |  |      |         | 13,129 |  |   |         | 12,950 | 
|                                                  | Diluted |                                       |         | 13,619 |      |   |         | 13,519 |  |   |         | 13,394 |  |      |         | 13,194 |  |   |         | 13,055 | 
|Cash, cash equivalents, and marketable securities |         | $                                     | 220,454 |        |      | $ | 176,637 |        |  | $ | 177,961 |        |  | $    | 181,789 |        |  | $ | 122,912 |       
|Working capital                                   |         |                                       | 287,474 |        |      |   | 245,875 |        |  |   | 246,311 |        |  |      | 213,967 |        |  |   | 225,619 |       
|Total assets                                      |         |                                       | 496,705 |        |      |   | 452,822 |        |  |   | 457,417 |        |  |      | 438,639 |        |  |   | 359,159 |       
|Long-term liabilities                             |         |                                       | 2,117   |        |      |   | 3,175   |        |  |   | 11,627  |        |  |      | 20,335  |        |  |   | 16,526  |       
|Stockholders equity                              |         |                                       | 399,590 |        |      |   | 367,401 |        |  |   | 356,198 |        |  |      | 302,000 |        |  |   | 298,494 |       



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (A) | The Company recorded asset impairment losses on a pre-tax basis
    of $8,883 in fiscal 2002 related to ANATEL COMMUNICATIONS
    CORPORATION (Anatel), the Companys
    telecommunications subsidiary, and certain old and unprofitable
    product lines within its semi-conductor test equipment business.
    The Company recorded asset impairment losses on a pre-tax basis
    of $3,200 in fiscal 2001 related to Anatel. These charges have
    been recorded in the cost of sales section of the Companys
    Consolidated Statements of Operations for fiscal 2002 and 2001.



| |     |                                                                                                                                                                                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (B) | The Company recorded asset impairment losses on a pre-tax basis
    of $6,599 in fiscal 2005 related to certain investments and
    abandoned technologies. These charges have been recorded in the
    operating expenses section of the Companys Consolidated
    Statements of Operations for fiscal 2005.
|
| | (C) | The Company recorded a gain on sale of marketable securities on
    an after tax basis of $27,388 in fiscal 2005, related to the
    Companys sale of its equity interest in Cedara.                                                                                                                         






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



10



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Critical Accounting Policies, Judgments, and Estimates




Revenue Recognition and Accounts Receivable


Revenue Recognition in Financial Statements


Accounting for Revenue Arrangements with Multiple
Deliverables


Software Revenue Recognition




11



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Inventories




Concentration of Credit Risk




Warranty Reserve




12



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Investments in and Advances to Affiliated Companies




Goodwill, Intangible Assets, and Other Long-Lived Assets




Income Taxes




13



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Results of Operations


Fiscal 2005 Compared to Fiscal 2004
















14



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15



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Fiscal 2004 Compared to Fiscal 2003
















16



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Liquidity and Capital Resources




17



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18



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|                           |  |       |        |           |        |   |        |           |  |   |           |  |  |         |       |  |  |   |       | 
|-------------------------- |  | ----- | ------ | --------- | ------ | - | ------ | --------- |  | - | --------- |  |  | ------- | ----- |  |  | - | ----- | 
|                           |  |       |        | Less than |        |   |        |           |  |   | More than | 
|Contractual Obligations    |  | Total |        |           | 1 year |   |        | 1-3 years |  |   | 4-5 years |  |  | 5 years |      
|                           |  |       |        |           |        |   |        |           |  |   |           |  |  |         |      
|Note payable               |  | $     | 42     |           |        | $ | 42     |           |  | $ |          |  |  | $       |      |  |  | $ |      | 
|Capital leases obligations |  |       | 172    |           |        |   | 110    |           |  |   | 62        |  |  |         |      |  |  |   |      | 
|Operating leases           |  |       | 7,907  |           |        |   | 1,663  |           |  |   | 2,571     |  |  |         | 1,820 |  |  |   | 1,853 | 
|Purchasing obligations     |  |       | 39,416 |           |        |   | 35,282 |           |  |   | 4,134     |  |  |         |      |  |  |   |      | 
|                           |  |       |        |           |        |   |        |           |  |   |           |  |  |         |      
|                           |  | $     | 47,537 |           |        | $ | 37,097 |           |  | $ | 6,767     |  |  | $       | 1,820 |  |  | $ | 1,853 | 
|                           |  |       |        |           |        |   |        |           |  |   |           |  |  |         |      





Impact of Inflation




New Accounting Pronouncements


Accounting Changes and Error Corrections. Accounting Changes, Reporting Accounting Changes in Interim Financial
Statements.




19



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Application of EITF
No. 00-19 to Freestanding Financial Instruments Originally
Issued as Employee Compensation.


Inventory Costs


Application of FASB Statement
No. 109, Accounting for Income Taxes, to the Tax Deduction
on Qualified Production Activities by the American Jobs Creation
Act of 2004


20



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The
Meaning of Other-Than-Temporary Impairment and Its Application
to Certain Investment.


Risk Factors


Forward-Looking Statements




Risk Factors




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




|                                 |  |                     |    |   |      |  |    |      |  |  |    |  
|-------------------------------- |  | ------------------- | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                                 |  | Year Ended July 31, |   
|                                 |  |                     |   
|                                 |  | 2005                |    |   | 2004 |  |    | 2003 | 
|                                 |  |                     |    |   |      |  |    |      | 
|L-3 Communications               |  |                     | 14 | % |      |  | 8  | %    |  |  | 43 | %
|Toshiba                          |  |                     | 14 | % |      |  | 12 | %    |  |  | 7  | %
|General Electric                 |  |                     | 10 | % |      |  | 10 | %    |  |  | 9  | %
|Siemens                          |  |                     | 8  | % |      |  | 9  | %    |  |  | 6  | %
|Philips                          |  |                     | 6  | % |      |  | 7  | %    |  |  | 4  | %
|Ten largest customers as a group |  |                     | 61 | % |      |  | 61 | %    |  |  | 77 | %



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Competition from existing or new companies in the medical and
security imaging technology industry could cause us 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.






We depend on our suppliers, some of which are the sole source
for our components, and our production would be substantially
curtailed if these suppliers are not able to meet our demands
and alternative sources are not available.






If we are left with excess inventory, our operating results
will be adversely affected.




22



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Uncertainties and adverse trends affecting our industry or
any of our major customers may adversely affect our operating
results.




Our 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 our business.




Our business strategy involves the pursuit of acquisitions or
business combinations, which may be difficult to integrate,
disrupt our business, dilute stockholder value or divert
management attention.




Our annual and quarterly operating results are subject to
fluctuations, which could affect the market price of our common
stock.






| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | variations in the timing and volume of customer orders relative
    to our manufacturing capacity;
|
| |  | introduction and market acceptance of our customers new
    products;                            

23



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| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | changes in demand for our customers existing products;                                                   
|
| |  | the timing of our expenditures in anticipation of future orders;                                          
|
| |  | effectiveness in managing our manufacturing processes;                                                    
|
| |  | changes in competitive and economic conditions generally or in
    our customers markets;                
|
| |  | changes in the cost or availability of components or skilled
    labor;                                   
|
| |  | foreign currency exposure; and                                                                            
|
| |  | investor and analyst perceptions of events affecting the
    Company, our competitors and/or our industry.



Loss of any of our key personnel could hurt our business
because of their industry experience and their technological
expertise.




If we are unable to maintain our technological expertise in
research and product development and manufacturing processes, we
will not be able to successfully compete.









|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk





24



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|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures



Disclosure Controls and Procedures








Managements Report on Internal Control Over Financial
Reporting




25



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Internal Control 
Integrated Framework




Internal Control  Integrated Framework




Remediation Measures for Identified Material Weakness






Quarter Ended January 31, 2005




| |   |                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------
| |  | Appointment of a President of Camtronics, succeeding the former
    President who left the employ of the Company.

26



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| |   |                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Appointment of a Controller, replacing Camtronics Vice
    President and Controller who left the employ of the Company.                                           
|
| |  | All subsidiary Controllers, who formerly reported to subsidiary
    General Managers, also now report directly to the Companys
    corporate finance organization.
|
| |  | Detailed quarterly review of all software revenue transactions
    by the Companys corporate finance organization.                                                

Quarter Ended April 30, 2005




| |   |                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Reviewed and revised, as required, Camtronics software
    revenue recognition policies, procedures, and processes to
    ensure compliance with SOP 97-2.                 
|
| |  | Conducted periodic internal audit reviews of Camtronics
    business practices and software revenue recognition policies and
    procedures.                               
|
| |  | Conducted software revenue recognition training for all
    Camtronics personnel who have responsibility for
    generating, administering, and recording software revenue.

Quarter Ended July 31, 2005




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Completed SOP 97-2 revenue contract checklists for all
    Camtronics recognized system revenue transactions.                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Completed revenue cycle narratives and COSO Matrices for
    Camtronics software revenue cycles. All key controls were
    identified, documented, and tested during the quarters ended
    April 30, 2005 and July 31, 2005 to ensure internal
    controls functioning in compliance with stated policies and
    procedures.                                                                                                                                                              
|
| |  | Reviewed and revised Camtronics customer order forms,
    contracts, and invoices, where required to ensure terms and
    conditions were aligned with the revenue recognition
    requirements set forth in SOP 97-2.                                                                                                                                                                                                                                                                       
|
| |  | Reorganized Camtronics customer contract files to ensure
    that all documentation is present to support each revenue
    transaction.                                                                                                                                                                                                                                                                                                                                                      
|
| |  | Implemented requirement that Camtronics salespersons to
    sign letters representing that all terms and conditions of the
    order with the customer have been disclosed to the company and
    included in the customer file.                                                                                                                                                                                                                                                             
|
| |  | Implemented requirement that the President and Controller of
    Camtronics, on a quarterly basis, contact each customer with
    recognized system revenues in the quarterly period in excess of
    $100,000 and complete a standardized checklist for the purpose
    of obtaining assurances from the customer that it has received
    and fully accepted all hardware, software, and other related
    services in accordance with the terms and conditions of the
    customers order.



Changes in Internal Control Over Financial Reporting







Item 9B.Other
Information




27



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PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant



|                    |  |     |    |          |       |            |      |         |  |  |                    |  |  |                                      
|------------------- |  | --- | -- | -------- | ----- | ---------- | ---- | ------- |  |  | ------------------ |  |  | -------------------------------------
|                    |  |     |    |          |       | Expiration |      |         | 
|                    |  |     |    | Director |       |            | of   |         |  | 
|Name                |  | Age |    |          | Since |            |      | Term(1) |  |  | Other Offices Held
|                    |  |     |    |          |       |            |      |         |  |  |                   
|John W. Wood Jr.    |  |     | 61 |          |       |            | 2004 |         |  |  | 2007               |  |  | President and Chief Executive Officer
|Bernard M. Gordon   |  |     | 78 |          |       |            | 1969 |         |  |  | 2007               |  |  |                                     
|John A. Tarello     |  |     | 74 |          |       |            | 1979 |         |  |  | 2007               |  |  |                                     
|M. Ross Brown       |  |     | 70 |          |       |            | 1984 |         |  |  | 2008               |  |  |                                     
|Edward F. Voboril   |  |     | 62 |          |       |            | 1990 |         |  |  | 2008               |  |  |                                     
|Gerald L. Wilson    |  |     | 66 |          |       |            | 1980 |         |  |  | 2006               |  |  |                                     
|Bruce W. Steinhauer |  |     | 72 |          |       |            | 1993 |         |  |  | 2006               |  |  |                                     
|Michael T. Modic    |  |     | 55 |          |       |            | 2001 |         |  |  | 2008               |  |  |                                     
|James J. Judge      |  |     | 48 |          |       |            | 2005 |         |  |  | 2006               |  |  |                                     



| |     |                                                                                                                                                                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The Board of Directors is divided into three classes, each
    having a three-year term of office. The term of one class
    expires each year. Directors hold office until the Annual
    Meeting of Stockholders held during the year noted and until
    their respective successors have been elected and qualified.



|                  |  |     |    |  |             |                                                              |               |  |      | 
|----------------- |  | --- | -- |  | ----------- | ------------------------------------------------------------ | ------------- |  | ---- | 
|                  |  |     |    |  |             | Date Since Office                                            |              
|Name              |  | Age |    |  | Office Held |                                                              | Has Been Held | 
|                  |  |     |    |  |             |                                                              |               | 
|John W. Wood Jr.  |  |     | 61 |  |             | President and Chief Executive Officer                        |               |  | 2003 | 
|John J. Millerick |  |     | 57 |  |             | Senior Vice President, Chief Financial Officer and Treasurer |               |  | 2000 | 
|Alex A. Van Adzin |  |     | 53 |  |             | Vice President, General Counsel, and Secretary               |               |  | 2003 | 











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Section 16(a) Beneficial Ownership Reporting
Compliance




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Audit Committee




Audit Committee Financial Expert




Code of Ethics




Recommendation of Nominees to Board of Directors









|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

EXECUTIVE COMPENSATION


SUMMARY COMPENSATION TABLE




|                            |                         |        |      |                     |        |                        |              |         |  |            |              |         |            |              |         |           |            |   |        |                 |  |  |       |        |  |   |     |       | 
|--------------------------- | ----------------------- | ------ | ---- | ------------------- | ------ | ---------------------- | ------------ | ------- |  | ---------- | ------------ | ------- | ---------- | ------------ | ------- | --------- | ---------- | - | ------ | --------------- |  |  | ----- | ------ |  | - | --- | ----- | 
|                            |                         |        |      |                     |        | Long-Term Compensation |              |         | 
|                            |                         |        |      | Annual Compensation |        |                        |              |         |  |           
|                            |                         |        |      |                     |        |                        | Restricted   |         |  | Securities |              |         |           
|                            |                         | Fiscal |      |                     |        |                        | Total Annual |         |  | Stock      |              |         | Underlying |              |         | All Other |           
|Name and Principal Position |                         | Year   |      |                     | Salary |                        |              | Bonuses |  |            | Compensation |         |            | Awards(A)(B) |         |           | Options(C) |   |        | Compensation(D) | 
|                            |                         |        |      |                     |        |                        |              |         |  |            |              |         |            |              |         |           |            |   |        |                 | 
|John W. Wood Jr.(1)         |                         |        | 2005 |                     |        | $                      | 406,000      |         |  |            |             |         |            | $            | 406,000 |           |            |   |       |                 |  |  |      |        |  | $ | 900 |      
|                            | President and Chief     |        |      | 2004                |        |                        |              | 406,000 |  |            | $            | 150,000 |            |              |         | 556,000   |            |   |        |                |  |  |       |       |  |   |     |      | 
|                            | Executive Officer       |        |      | 2003                |        |                        |              | 124,900 |  |            |              |        |            |              |         | 124,900   |            |   | $      | 1,880,000       |  |  |       | 15,000 |  |   |     |      | 
|John J. Millerick           |                         |        | 2005 |                     |        | $                      | 250,000      |         |  | $          | 55,000       |         |            | $            | 305,000 |           |            |   |       |                 |  |  |      |        |  | $ | 900 |      
|                            | Senior Vice President,  |        |      | 2004                |        |                        |              | 253,500 |  |            |              | 25,000  |            |              |         | 278,500   |            |   | $      | 279,200         |  |  |       |       |  |   |     | 3,700 | 
|                            | Chief Financial Officer |        |      | 2003                |        |                        |              | 240,000 |  |            |              | 30,000  |            |              |         | 270,000   |            |   |        | 175,000         |  |  |       |       |  |   |     |      | 
|                            | And Treasurer           |        |      |                     |        |                        |              |         |  |            |              |         |            |              |         |           |            |   |        |                 |  |  |       |        |  |   |     |       | 
|Alex Van Adzin(2)           |                         |        | 2005 |                     |        | $                      | 190,000      |         |  | $          | 55,000       |         |            | $            | 245,000 |           |            | $ | 82,640 |                 |  |  | 2,000 |        |  | $ | 600 |      
|                            | Vice President, General |        |      | 2004                |        |                        |              | 146,200 |  |            |              |        |            |              |         | 146,200   |            |   |        | 209,400         |  |  |       | 5,000  |  |   |     |      | 
|                            | Counsel, and Secretary  |        |      | 2003                |        |                        |              |        |  |            |              |        |            |              |         |          |            |   |        |                |  |  |       |       |  |   |     |      | 

30



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##### Table of Contents







|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | Mr. Wood Jr. joined the Company as President in April 2003
    and was appointed Chief Executive Officer in August 2003.
|   
|(2) | Mr. Van Adzin joined the Company in October 2003.                                                                       



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Represents stock grants under the Companys Key Employee
    Stock Bonus Plans, pursuant to which Common Stock of the Company
    may be granted to key employees to encourage them to exert their
    best efforts on behalf of the Company. Each recipient of the
    Common Stock pursuant to the Bonus Plan is required to execute a
    non-competition agreement in a form satisfactory to the Company.
    The Bonus Plan is administered by a committee appointed by the
    Board of Directors consisting of the Chairman of the Board and
    three other Directors who are not eligible to participate in the
    Bonus Plan. Generally, the Common Stock granted pursuant to the
    Bonus Plan is not transferable for a period of three years from
    the date of the grant and is subject to a risk of forfeiture in
    the event that the recipient leaves the employ of the Company
    during this period for any reason. Generally, the transfer
    restrictions will lapse in four equal installments beginning in
    the third year from the date of grant, provided that the
    recipient remains in the employ of the Company. Failure to
    remain in the Companys employ during all of the subsequent
    three-year period will result in a forfeiture of shares as to
    which restrictions on disposition still exist. The Common Stock
    granted pursuant to the Bonus Plan is held in escrow by the
    Company until such restrictions on disposition lapse. However,
    while in escrow, the recipient has the right to vote such shares
    of Common Stock and to receive any cash dividends thereon. The
    Board of Directors, acting upon the recommendation of the Stock
    Bonus Plan Committee, may at the time of grant designate a
    different schedule upon which the transfer restrictions lapse.
|   
|(B) |  | The following table reflects stock bonus awards for which
    transfer restrictions had not yet lapsed as of July 31,
    2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|                  |  |        |        |                 |               |   |           | 
|----------------- |  | ------ | ------ | --------------- | ------------- | - | --------- | 
|                  |  |        |        | Market Value at |              
|                  |  | Shares |        |                 | Date of Grant |  
|                  |  |        |        |                 |               |  
|John W. Wood Jr.  |  |        | 30,000 |                 |               | $ | 1,410,000 | 
|John J. Millerick |  |        | 15,000 |                 |               |   | 634,747   | 
|Alex A. Van Adzin |  |        | 7,000  |                 |               |   | 292,040   | 



|    |  |                                                                                                                                                                       
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(C) |  | Represents options granted pursuant to the Key Employee
    Incentive Stock Option Plan dated June 11, 1998, as amended
    on October 12, 2000 and November 16, 2001.
|   
|(D) |  | Represents profit sharing distribution.                                                                                                                               

31



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##### Table of Contents



Stock Option Grants in Last Fiscal Year




|                  |  |                   |       |     |                      |  |   |           |  |                  |            |  |             |        |           |  |         |   |        |  |  |   |        | 
|----------------- |  | ----------------- | ----- | --- | -------------------- |  | - | --------- |  | ---------------- | ---------- |  | ----------- | ------ | --------- |  | ------- | - | ------ |  |  | - | ------ | 
|                  |  | Individual Grants |       |     | Potential Realizable | 
|                  |  |                   |       |     | Value at Assumed     | 
|                  |  | Number of         |       |     | Percent of           |  |   |           |  | Annual Rates of  |           
|                  |  | Securities        |       |     | Total Options        |  |   |           |  | Stock Price      |           
|                  |  | Underlying        |       |     | Granted to           |  |   |           |  | Appreciation for |           
|                  |  | Options           |       |     | Employees in         |  |   | Exercise  |  |                  |            |  | Option Term |       
|                  |  | Granted           |       |     | Fiscal Year          |  |   | Price     |  |                  | Expiration |  |             |        |          
|Name              |  | (#)               |       |     | (%)                  |  |   | ($/share) |  |                  | Date       |  |             | 5% ($) |           |  | 10% ($) |  
|                  |  |                   |       |     |                      |  |   |           |  |                  |            |  |             |        |           |  |         |  
|John W. Wood, Jr. |  |                   |      |     |                      |  |  |           |  |                  |           |  |             |        |          |  |         |   |       |  |  |   |       | 
|John J. Millerick |  |                   |      |     |                      |  |  |           |  |                  |           |  |             |        |          |  |         |   |       |  |  |   |       | 
|Alex A. Van Adzin |  |                   | 2,000 | (1) |                      |  | 2 | %         |  | $                | 41.32      |  |             |        | 10/8/2011 |  |         | $ | 34,000 |  |  | $ | 78,000 | 



| |     |                                                                                                                                                                                                                                                                                 
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | These options will become exercisable in four equal (25%) annual
    installments with the first installment becoming exercisable two
    years from the date of the grant which was October 8, 2004.
    Unexercised options expire seven years from the date of the
    grant.

Stock Option Exercises in Last Fiscal Year and Fiscal
Year-End Option Values




|                  |  |                 |        |  |          |                        |                            |             |                      |                       |               |  |  |             |        |  |               |   |        |  |  |   |        | 
|----------------- |  | --------------- | ------ |  | -------- | ---------------------- | -------------------------- | ----------- | -------------------- | --------------------- | ------------- |  |  | ----------- | ------ |  | ------------- | - | ------ |  |  | - | ------ | 
|                  |  |                 |        |  |          | Number of Securities   |                            |             | Value of Unexercised |                      
|                  |  |                 |        |  |          | Underlying Unexercised |                            |             | In-the-Money Options |                      
|                  |  | Number of       |        |  |          |                        | Options at Fiscal Year End |             |                      | at Fiscal Year End(1) |              
|                  |  | Shares Acquired |        |  | Value    |                        |                            |             |                      |                       |               | 
|                  |  | on Exercise     |        |  | Realized |                        |                            | Exercisable |                      |                       | Unexercisable |  |  | Exercisable |        |  | Unexercisable |  
|                  |  |                 |        |  |          |                        |                            |             |                      |                       |               |  |  |             |        |  |               |  
|John W. Wood, Jr. |  |                 |       |  |          |                        |                           |             |                      |                       | 3,750         |  |  |             | 11,250 |  |               | $ | 16,388 |  |  | $ | 49,162 | 
|John J. Millerick |  |                 | 10,000 |  |          | $                      | 145,600                    |             |                      |                       | 7,501         |  |  |             | 2,499  |  |               |   | 61,846 |  |  |   | 20,604 | 
|Alex A. Van Adzin |  |                 |       |  |          |                        |                           |             |                      |                       |              |  |  |             | 7,000  |  |               |   |       |  |  |   | 62,800 | 



| |     |                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The value of in-the-money options at year-end represents the
    aggregate difference between the option exercise price and the
    market value of the common stock at July 31, 2005.
    In-the-money options are options whose exercise
    price was less than $51.37, the closing price of the Common
    Stock on July 29, 2005, the last day the Common Stock
    traded in fiscal 2005.

Compensation of Directors






32



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##### Table of Contents













Compensation Committee Interlocks and Insider
Participation









|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters



|                               |                                                                    |                      |                    |   |          |  |     |   | 
|------------------------------ | ------------------------------------------------------------------ | -------------------- | ------------------ | - | -------- |  | --- | - | 
|                               |                                                                    | Amount and Nature of |                    |   | Percent  | 
|Name and Address               |                                                                    | Beneficial Ownership |                    |   | of Class | 
|                               |                                                                    |                      |                    |   |          | 
|T. Rowe Price Associates, Inc. |                                                                    |                      | 1,150,680 shares(1 | ) |          |  | 8.3 | %
|                               | 100 East Pratt Street
    Baltimore, MD 21202                      |                      |                    |   |          |  |     |   | 
|Oppenheimer Funds, Inc.        |                                                                    |                      | 729,800 shares(1   | ) |          |  | 5.3 | %
|                               | 2 World Financial Center
    11thFloor
    New York, NY 10281-1008 |                      |                    |   |          |  |     |   | 



| |     |                                                                                                                                                                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The Company has been advised by T. Rowe Price Associates,
    Inc. and Oppenheimer Funds, Inc, that in their capacity as
    investment advisors, each is a deemed beneficial owner of the
    Companys Common Stock on August 31, 2005, in the
    amount indicated next to each name, respectively.

33



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##### Table of Contents





|                                                                         |  |  |                 |      |  |  |     |  
|------------------------------------------------------------------------ |  |  | --------------- | ---- |  |  | --- | -
|Bernard M. Gordon                                                        |  |  | 494,274  shares | (2)  |  |  | 3.6 | %
|John W. Wood Jr.                                                         |  |  | 48,750  shares  | (3)  |  |  | *   |  
|John A. Tarello                                                          |  |  | 6,667  shares   | (4)  |  |  | *   |  
|M. Ross Brown                                                            |  |  | 1,667  shares   | (5)  |  |  | *   |  
|Edward F. Voboril                                                        |  |  | 11,667  shares  | (6)  |  |  | *   |  
|Gerald L. Wilson                                                         |  |  | 4,667  shares   | (7)  |  |  | *   |  
|Bruce W. Steinhauer                                                      |  |  | 11,667  shares  | (8)  |  |  | *   |  
|Michael T. Modic                                                         |  |  | 5,000  shares   | (9)  |  |  | *   |  
|James J. Judge                                                           |  |  | -0- shares      |      |  |  | *   |  
|John J. Millerick                                                        |  |  | 22,501  shares  | (10) |  |  | *   |  
|Alex A. Van Adzin                                                        |  |  | 8,250  shares   | (11) |  |  | *   |  
|All directors and current executive officers as a group
    (11 persons) |  |  | 615,110  shares | (12) |  |  | 4.5 | %



| |   |                                  
| | - | ---------------------------------
| | * | Represents less than 1% ownership



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The amounts shown are based upon information furnished by the
    individual directors and officers. Unless otherwise noted, the
    beneficial owners have sole voting and investment power with
    respect to the shares listed.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (2) | Mr. Gordon serves as Co-Trustee of the Bernard Gordon
    Charitable Remainder Unitrust (the Trust). The
    Trustees have full power to vote or dispose of the shares held
    by the Trust. Upon the death of Mr. Gordon, all of the
    assets of the Trust, in general, will be distributed to The
    Gordon Foundation, a Section 501(c)(3) trust formed by
    Mr. Gordon with its principal office located at
    14 Electronics Ave., Danvers, Massachusetts. The total
    shares reported above include 15,623 shares owned by The
    Gordon Foundation and 1,667 shares issuable upon exercise
    of options exercisable within 60 days of August 31,
    2005.
|
| | (3) | Includes 30,000 shares of restricted stock and
    3,750 shares issuable upon exercise of options exercisable
    within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (4) | Includes 6,667 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (5) | Includes 1,667 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (6) | Includes 11,667 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (7) | Includes 1,667 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (8) | Includes 11,667 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (9) | Includes 5,000 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005 and
    5,000 shares of restricted stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



| |      |                                                                                                                                                        
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | (10) | Includes of 7,501 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005 and
    15,000 shares of restricted stock.
|
| | (11) | Includes 1,250 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005 and
    7,000 shares of restricted stock.    
|
| | (12) | Includes 52,503 shares issuable upon exercise of options
    exercisable within 60 days of August 31, 2005.                                            

34



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##### Table of Contents





Equity Compensation Plan Information


|                                                           |       |                      |         |         |                      |                      |                         |                         |  |  |         |         |    
|---------------------------------------------------------- | ----- | -------------------- | ------- | ------- | -------------------- | -------------------- | ----------------------- | ----------------------- |  |  | ------- | ------- | ---
|                                                           |       |                      |         |         |                      | (c)                  |                        
|                                                           |       |                      |         |         |                      | Number of Securities |                        
|                                                           |       | (a)                  |         |         |                      |                      | Remaining Available for |                        
|                                                           |       | Number of Securities |         |         | (b)                  |                      |                         | Future Issuance Under   | 
|                                                           |       | to be Issued Upon    |         |         | Weighted-Average     |                      |                         | Equity Compensation     | 
|                                                           |       | Exercise of          |         |         | Exercise Price of    |                      |                         | Plans (Excluding        | 
|                                                           |       | Outstanding Options, |         |         | Outstanding Options, |                      |                         | Securities Reflected in | 
|Plan Category                                              |       | Warrants and Rights  |         |         | Warrants and Rights  |                      |                         | Column (a))             | 
|                                                           |       |                      |         |         |                      |                      |                         |                         | 
|Equity compensation plans approved by security holders     |       |                      | 678,324 |         |                      | $                    | 41.71                   |                         |  |  | 880,028 | (1)    
|Equity compensation plans not approved by security holders |       |                      | 0       |         |                      |                      | NA                      |                         |  |  | 0       |        
|                                                           |       |                      |         |         |                      |                      |                         |                         | 
|                                                           | Total |                      |         | 678,324 |                      |                      | $                       | 41.71                   |  |  |         | 880,028 | (1)
|                                                           |       |                      |         |         |                      |                      |                         |                         | 



| |     |                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Includes 499,403 shares issuable under the Companys
    Employee Stock Purchase Plan in connection with current and
    future offering periods under that plan.






|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



|                      |  |                |       |  |                |   |       | 
|--------------------- |  | -------------- | ----- |  | -------------- | - | ----- | 
|                      |  | Fiscal 2005    |       |  | Fiscal 2004    |  
|                      |  |                |       |  |                |  
|                      |  | (In thousands) |       |  | (In thousands) |  
|Audit Fees(a)         |  | $              | 2,550 |  |                | $ | 1,029 | 
|Audit-Related Fees(b) |  |                | 17    |  |                |   | 22    | 
|Tax Fees(c)           |  |                | 377   |  |                |   | 500   | 
|All Other Fees(d)     |  |                |      |  |                |   |      | 
|                      |  |                |       |  |                |  
|                      |  | $              | 2,944 |  |                | $ | 1,551 | 
|                      |  |                |       |  |                |  



| |     |                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------
| | (a) | Fees for audit services billed related to fiscal 2005 consisted
    substantially of the following:



| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | Audit of the Companys July 31, 2005 annual financial
    statements                                   
|
| |  | Reviews of the Companys quarterly financial statements in
    fiscal 2005                             
|
| |  | Internal control attestation procedures as required by the
    Sarbanes-Oxley Act of 2002, Section 404.





| |   |                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Audit of the Companys July 31, 2004 annual financial
    statements                                                                                           
|
| |  | Reviews of the Companys quarterly financial statements in
    fiscal 2004                                                                                     
|
| |  | Audits related to the restatement of the Companys
    financial statements                                                                                    
|
| |  | Internal control attestation procedures as required by the
    Sarbanes-Oxley Act of 2002, Section 404 prior to the delay
    in effective date for the Company

35



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##### Table of Contents





| |     |                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------
| | (b) | Fees for audit-related services billed related to fiscal 2005
    and 2004 consisted of the following:



| |   |                        
| | - | -----------------------
| |  | Filing of SEC Form S-8 
|
| |  | Audits of benefit plans



| |     |                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | Fees for tax services billed in fiscal 2005 and 2004 consisted
    substantially of tax compliance and tax planning and advice in
    relation to:



| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | U.S. and foreign tax compliance                                                  
|
| |  | Tax planning and advice services relating to international
    restructuring plan



| |     |                                                                  
| | --- | -----------------------------------------------------------------
| | (d) | The Company did not incur any other fees in fiscal 2005 and 2004.





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##### Table of Contents






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

|    |  |    |  |                                                                                                                                                                                   |  |        |       | 
|--- |  | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ----- | 
|    |  |    |  |                                                                                                                                                                                   |  | Page   |      
|    |  |    |  |                                                                                                                                                                                   |  | Number |      
|    |  |    |  |                                                                                                                                                                                   |  |        |      
|(a) |  | 1. |  | Financial Statements                                                                                                                                                              |  |        |       | 
|    |  |    |  | Report of Independent Registered Public Accounting Firm                                                                                                                           |  |        | 39-40 | 
|    |  |    |  | Consolidated Balance Sheets at July 31, 2005 and 2004                                                                                                                             |  |        | 41    | 
|    |  |    |  | Consolidated Statements of Operations for the years ended
    July 31, 2005, 2004 and 2003                                                                                        |  |        | 42    | 
|    |  |    |  | Consolidated Statements of Stockholders Equity for the
    years ended July 31, 2005, 2004 and 2003                                                                              |  |        | 43    | 
|    |  |    |  | Consolidated Statements of Cash Flows for the years ended
    July 31, 2005, 2004 and 2003                                                                                        |  |        | 44    | 
|    |  |    |  | Notes to Consolidated Financial Statements                                                                                                                                        |  |        | 45-73 | 
|    |  | 2. |  | Financial Statement Schedule II.  Valuation and
    Qualifying Accounts                                                                                                          |  |        | 74    | 
|    |  |    |  | Other schedules have been omitted because they are not required,
    not applicable, or the required information is furnished in the
    consolidated statements or notes thereto |  |        |       | 
|    |  | 3. |  | Exhibits  See Index to Exhibits                                                                                                                                                  |  |        | 75-76 | 

37



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##### Table of Contents






SIGNATURES






| |                         
| | ------------------------
| | Analogic
    Corporation



| |    |                     
| | -- | --------------------
| | By | /s/ John W. Wood Jr.

| |                                      
| | -------------------------------------
| |                                      
| | John W. Wood Jr.                     
| | President and Chief Executive Officer





|                                               |  |                                                                                                          |  |                  |  | 
|---------------------------------------------- |  | -------------------------------------------------------------------------------------------------------- |  | ---------------- |  | 
|Name                                           |  | Title                                                                                                    |  | Date            
|                                               |  |                                                                                                          |  |                 
|                                              
|/s/ John W. Wood Jr.John
    W. Wood Jr.       |  | President and Chief Executive Officer (Principal Executive
    Officer) and Director                     |  | October 14, 2005
|                                              
|/s/ John J. MillerickJohn
    J. Millerick     |  | Chief Financial Officer and Treasurer
    (Principal Financial Officer and Principal Accounting Officer) |  | October 14, 2005
|                                              
|/s/ John A. TarelloJohn
    A. Tarello         |  | Chairman of the Board                                                                                    |  | October 14, 2005
|                                              
|/s/ M. Ross BrownM.
    Ross Brown             |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ Bernard M. GordonBernard
    M. Gordon     |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ James J. JudgeJames
    J. Judge           |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ Michael T. ModicMichael
    T. Modic       |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ Bruce W. SteinhauerBruce
    W. Steinhauer |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ Edward F. VoborilEdward
    F. Voboril     |  | Director                                                                                                 |  | October 14, 2005
|                                              
|/s/ Gerald L. WilsonGerald
    L. Wilson       |  | Director                                                                                                 |  | October 14, 2005

38



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Consolidated financial statements and financial statement
schedule




Internal control over financial reporting


Internal Control-Integrated Framework






39



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##### Table of Contents









Internal Control  Integrated Framework Internal Control  Integrated Framework








40



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##### Table of Contents



ANALOGIC CORPORATION


CONSOLIDATED BALANCE SHEETS


(In thousands, except share data)


|                                                    |                                                                                                                                                                                                    |                             |        |         |         |  |        |         |         | 
|--------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------ | ------- | ------- |  | ------ | ------- | ------- | 
|                                                    |                                                                                                                                                                                                    | July 31,                    |       
|                                                    |                                                                                                                                                                                                    |                             |       
|                                                    |                                                                                                                                                                                                    | 2005                        |        |         | 2004    | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|Assets                                             
|Current assets:                                     |                                                                                                                                                                                                    |                             |        |         |         |  |        |        
|                                                    | Cash and cash equivalents                                                                                                                                                                          |                             | $      | 208,116 |         |  | $      | 149,549 |        
|                                                    | Marketable securities, at fair value                                                                                                                                                               |                             |        | 12,338  |         |  |        | 27,088  |        
|                                                    | Accounts and notes receivable, net of allowance for doubtful
    accounts of $2,295 in 2005, and $2,493 in 2004                                                                                    |                             |        | 55,888  |         |  |        | 54,483  |        
|                                                    | Accounts receivable from affiliates, net                                                                                                                                                           |                             |        | 725     |         |  |        | 1,015   |        
|                                                    | Inventories                                                                                                                                                                                        |                             |        | 70,026  |         |  |        | 65,952  |        
|                                                    | Costs related to deferred revenue                                                                                                                                                                  |                             |        | 13,071  |         |  |        | 12,723  |        
|                                                    | Refundable and deferred income taxes                                                                                                                                                               |                             |        | 14,928  |         |  |        | 10,861  |        
|                                                    | Other current assets                                                                                                                                                                               |                             |        | 7,380   |         |  |        | 6,450   |        
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    |                                                                                                                                                                                                    | Total current assets        |        |         | 382,472 |  |        |         | 328,121 | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|Property, plant and equipment, net                  |                                                                                                                                                                                                    |                             | 87,554 |         |         |  | 91,077 |        
|Investments in and advances to affiliated companies |                                                                                                                                                                                                    |                             | 983    |         |         |  | 10,967 |        
|Capitalized software, net                           |                                                                                                                                                                                                    |                             | 12,511 |         |         |  | 9,502  |        
|Goodwill                                            |                                                                                                                                                                                                    |                             | 746    |         |         |  | 1,565  |        
|Intangible assets, net                              |                                                                                                                                                                                                    |                             | 4,971  |         |         |  | 9,223  |        
|Costs related to deferred revenue                   |                                                                                                                                                                                                    |                             |       |         |         |  | 219    |        
|Other assets                                        |                                                                                                                                                                                                    |                             | 5,579  |         |         |  | 1,397  |        
|Deferred income taxes                               |                                                                                                                                                                                                    |                             | 1,889  |         |         |  | 751    |        
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    |                                                                                                                                                                                                    | Total Assets                |        | $       | 496,705 |  |        | $       | 452,822 | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                   
|Liabilities and Stockholders Equity               
|Current liabilities:                                |                                                                                                                                                                                                    |                             |        |         |         |  |        |        
|                                                    | Notes payable                                                                                                                                                                                      |                             | $      | 42      |         |  | $      | 785     |        
|                                                    | Obligations under capital leases                                                                                                                                                                   |                             |        | 104     |         |  |        | 177     |        
|                                                    | Accounts payable, trade                                                                                                                                                                            |                             |        | 22,532  |         |  |        | 21,707  |        
|                                                    | Accrued liabilities                                                                                                                                                                                |                             |        | 22,444  |         |  |        | 21,380  |        
|                                                    | Deferred revenue                                                                                                                                                                                   |                             |        | 28,486  |         |  |        | 26,281  |        
|                                                    | Advanced payments                                                                                                                                                                                  |                             |        | 10,223  |         |  |        | 6,125   |        
|                                                    | Accrued income taxes                                                                                                                                                                               |                             |        | 11,167  |         |  |        | 5,791   |        
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    |                                                                                                                                                                                                    | Total current liabilities   |        |         | 94,998  |  |        |         | 82,246  | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|Long-term liabilities:                              |                                                                                                                                                                                                    |                             |        |         |         |  |        |        
|                                                    | Obligations under capital leases                                                                                                                                                                   |                             |        | 58      |         |  |        | 155     |        
|                                                    | Deferred revenue                                                                                                                                                                                   |                             |        | 295     |         |  |        | 1,459   |        
|                                                    | Deferred income taxes                                                                                                                                                                              |                             |        | 1,764   |         |  |        | 1,561   |        
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    |                                                                                                                                                                                                    | Total long-term liabilities |        |         | 2,117   |  |        |         | 3,175   | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|Commitments and guarantees (Note 11)                |                                                                                                                                                                                                    |                             |        |         |         |  |        |        
|Stockholders equity:                               |                                                                                                                                                                                                    |                             |        |         |         |  |        |        
|                                                    | Common stock, $.05 par value; 30,000,000 shares
    authorized; 13,804,064 shares issued and outstanding as of
    July 31, 2005; 13,666,792 shares issued and
    outstanding as of July 31, 2004 |                             |        | 715     |         |  |        | 713     |        
|                                                    | Capital in excess of par value                                                                                                                                                                     |                             |        | 52,793  |         |  |        | 47,257  |        
|                                                    | Retained earnings                                                                                                                                                                                  |                             |        | 348,499 |         |  |        | 324,025 |        
|                                                    | Accumulated other comprehensive income                                                                                                                                                             |                             |        | 3,319   |         |  |        | 2,141   |        
|                                                    | Unearned compensation                                                                                                                                                                              |                             |        | (5,736  | )       |  |        | (6,735  | )      
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    |                                                                                                                                                                                                    | Total stockholders equity  |        |         | 399,590 |  |        |         | 367,401 | 
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 
|                                                    | Total Liabilities and Stockholders Equity                                                                                                                                                         |                             | $      | 496,705 |         |  | $      | 452,822 |        
|                                                    |                                                                                                                                                                                                    |                             |        |         |         | 



41



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##### Table of Contents



ANALOGIC CORPORATION


CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands, except per share data)


|                                     |                                                 |                      |         |         |        |   |         |         |        |   |         |         |        | 
|------------------------------------ | ----------------------------------------------- | -------------------- | ------- | ------- | ------ | - | ------- | ------- | ------ | - | ------- | ------- | ------ | 
|                                     |                                                 | Years Ended July 31, |        
|                                     |                                                 |                      |        
|                                     |                                                 | 2005                 |         |         | 2004   |   |         | 2003    |       
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Net revenue:                         |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     | Product                                         |                      | $       | 336,249 |        |   | $       | 327,129 |        |   | $       | 442,431 |       
|                                     | Engineering                                     |                      |         | 19,168  |        |   |         | 20,081  |        |   |         | 20,856  |       
|                                     | Other                                           |                      |         | 9,154   |        |   |         | 8,347   |        |   |         | 8,410   |       
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Total net revenue                    |                                                 |                      | 364,571 |         |        |   | 355,557 |         |        |   | 471,697 |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Cost of sales:                       |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     | Product                                         |                      |         | 202,623 |        |   |         | 195,920 |        |   |         | 256,294 |       
|                                     | Engineering                                     |                      |         | 16,659  |        |   |         | 13,487  |        |   |         | 14,897  |       
|                                     | Other                                           |                      |         | 5,266   |        |   |         | 4,863   |        |   |         | 4,738   |       
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Total cost of sales                  |                                                 |                      | 224,548 |         |        |   | 214,270 |         |        |   | 275,929 |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Gross margin                         |                                                 |                      | 140,023 |         |        |   | 141,287 |         |        |   | 195,768 |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Operating expenses:                  |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     | Research and product development                |                      |         | 57,976  |        |   |         | 58,673  |        |   |         | 55,099  |       
|                                     | Selling and marketing                           |                      |         | 37,819  |        |   |         | 37,025  |        |   |         | 34,866  |       
|                                     | General and administrative                      |                      |         | 43,646  |        |   |         | 39,200  |        |   |         | 34,971  |       
|                                     | Asset impairment charges                        |                      |         | 6,599   |        |   |         |        |        |   |         |        |       
|                                     |                                                 |                      |         |         |        |   |         |         |       
|                                     |                                                 |                      | 146,040 |         |        |   | 134,898 |         |        |   | 124,936 |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Income (loss) from operations        |                                                 |                      | (6,017  | )       |        |   | 6,389   |         |        |   | 70,832  |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Other (income) expense:              |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     | Interest income                                 |                      |         | (5,243  | )      |   |         | (3,669  | )      |   |         | (5,035  | )     
|                                     | Interest expense                                |                      |         | 54      |        |   |         | 294     |        |   |         | 360     |       
|                                     | Equity (gain) loss in unconsolidated affiliates |                      |         | (262    | )      |   |         | (577    | )      |   |         | 3,506   |       
|                                     | Gain on sale of marketable securities           |                      |         | (43,829 | )      |   |         |        |        |   |         |        |       
|                                     | Other                                           |                      |         | (8      | )      |   |         | 240     |        |   |         | (5,756  | )     
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Total other (income) expense         |                                                 |                      | (49,288 | )       |        |   | (3,712  | )       |        |   | (6,925  | )      
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Income before income taxes           |                                                 |                      | 43,271  |         |        |   | 10,101  |         |        |   | 77,757  |        
|Provision for income taxes           |                                                 |                      | 14,409  |         |        |   | 1,747   |         |        |   | 28,226  |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Net income                           |                                                 | $                    | 28,862  |         |        | $ | 8,354   |         |        | $ | 49,531  |        
|                                     |                                                 |                      |         |         |        |   |         |         |       
|Net income per common share:         |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     |                                                 | Basic                |         | $       | 2.13   |   |         | $       | 0.62   |   |         | $       | 3.74   | 
|                                     |                                                 | Diluted              |         |         | 2.12   |   |         |         | 0.62   |   |         |         | 3.70   | 
|Weighted-average shares outstanding: |                                                 |                      |         |         |        |   |         |         |        |   |         |        
|                                     |                                                 | Basic                |         |         | 13,566 |   |         |         | 13,463 |   |         |         | 13,251 | 
|                                     |                                                 | Diluted              |         |         | 13,619 |   |         |         | 13,519 |   |         |         | 13,394 | 



42



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##### Table of Contents



ANALOGIC CORPORATION


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


Years Ended July 31, 2005, 2004, 2003


(In thousands, except share data)


|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |        |  
|----------------------------------------- | ------------------------------------------------------------------------------------ | ------------ | ---------- | ------- | ---------- | - | --- | -------------- |  | ----------- | -------- | ----- | ----- | ------------- | -------- | ------- | -------- | ----- | ------ | ------------- |  | - | ------------ | ------ |  | ------ | ----- | ----- | - | - | ------ | ------ | - | - | ------- | ------ | -
|                                          |                                                                                      |              |            |         |            |   |     |                |  | Accumulated |          |       |       |               |         
|                                          |                                                                                      | Common Stock |            |         | Capital in |   |     | Treasury Stock |  |             |          |       | Other |               |          |         |          | Total |       
|                                          |                                                                                      |              |            |         | Excess of  |   |     |                |  |             | Retained |       |       | Comprehensive |          |         | Unearned |       |        | Stockholders | 
|                                          |                                                                                      | Shares       |            |         | Amount     |   |     | Par Value      |  |             | Shares   |       |       | Amount        |          |         | Earnings |       |        | Income        |  |   | Compensation |        |  | Equity |      
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Balance, July 31, 2002                    |                                                                                      |              | 14,126,202 |         |            | $ | 706 |                |  | $           | 39,379   |       |       |               | (855,154 | )       |          | $     | (8,313 | )             |  | $ | 274,757      |        |  | $      | (320  | )     |   | $ | (4,209 | )      |   | $ | 302,000 |       
|Shares issued for:                        |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Stock options                                                                        |              |            |         |            |   |     |                |  |             |          | 3,661 |       |               |          | 149,730 |          |       |        | 1,451         |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 5,112  |  
|                                          | Grants, net of cancellations                                                         |              |            | 65,834  |            |   |     | 4              |  |             |          | 2,951 |       |               |          | (4,500  | )        |       |        |               |  |   |              |        |  |        |       |       |   |   |        | (2,953 | ) |   |         | 2      |  
|                                          | Stock purchase plan                                                                  |              |            |         |            |   |     |                |  |             |          | 280   |       |               |          | 8,768   |          |       |        | 85            |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 365    |  
|Tax benefit of disqualifying dispositions |                                                                                      |              |            |         |            |   |     |                |  |             | 958      |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 958     |       
|Amortization of unearned compensation     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   | 1,476  |        |   |   | 1,476   |       
|Dividends paid ($0.32 per share)          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   | (4,275       | )      |  |        |       |       |   |   |        |        |   |   | (4,275  | )     
|Comprehensive income:                     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Net income for the year                                                              |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              | 49,531 |  |        |       |       |   |   |        |        |   |   |         | 49,531 |  
|                                          | Translation adjustments (net of tax of $932)                                         |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | 1,416 |   |   |        |        |   |   |         | 1,416  |  
|                                          | Change in unrealized marketable securities gains and losses (net
    of tax of $254) |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | (387  | ) |   |        |        |   |   |         | (387   | )
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Total Comprehensive Income                |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 50,560  |       
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Balance, July 31, 2003                    |                                                                                      |              | 14,192,036 |         |            |   | 710 |                |  |             | 47,229   |       |       |               | (701,156 | )       |          |       | (6,777 | )             |  |   | 320,013      |        |  |        | 709   |       |   |   | (5,686 | )      |   |   | 356,198 |       
|Shares issued for:                        |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Stock options                                                                        |              |            | 95,507  |            |   |     |                |  |             |          | 3,404 |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 3,404  |  
|                                          | Grants, net of cancellations                                                         |              |            | 64,666  |            |   |     | 3              |  |             |          | 2,698 |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        | (2,701 | ) |   |         |        |  
|                                          | Stock purchase plan                                                                  |              |            | 15,739  |            |   |     |                |  |             |          | 537   |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 537    |  
|Elimination of treasury stock             |                                                                                      |              | (701,156   | )       |            |   |     |                |  |             | (6,777   | )     |       |               | 701,156  |         |          |       | 6,777  |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|Tax benefit of disqualifying dispositions |                                                                                      |              |            |         |            |   |     |                |  |             | 166      |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 166     |       
|Amortization of unearned compensation     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   | 1,652  |        |   |   | 1,652   |       
|Dividends paid ($0.32 per share)          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   | (4,342       | )      |  |        |       |       |   |   |        |        |   |   | (4,342  | )     
|Comprehensive income:                     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Net income for the year                                                              |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              | 8,354  |  |        |       |       |   |   |        |        |   |   |         | 8,354  |  
|                                          | Translation adjustments (net of tax of $1,295)                                       |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | 1,977 |   |   |        |        |   |   |         | 1,977  |  
|                                          | Change in unrealized marketable securities gains and losses (net
    of tax of $357) |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | (545  | ) |   |        |        |   |   |         | (545   | )
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Total Comprehensive Income                |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 9,786   |       
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Balance, July 31, 2004                    |                                                                                      |              | 13,666,792 |         |            |   | 713 |                |  |             | 47,257   |       |       |               |         |         |          |       |       |               |  |   | 324,025      |        |  |        | 2,141 |       |   |   | (6,735 | )      |   |   | 367,401 |       
|Shares issued for:                        |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Stock options                                                                        |              |            | 102,350 |            |   |     |                |  |             |          | 3,774 |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 3,774  |  
|                                          | Grants, net of cancellations                                                         |              |            | 21,554  |            |   |     | 2              |  |             |          | 914   |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        | (916   | ) |   |         |        |  
|                                          | Stock purchase plan                                                                  |              |            | 13,368  |            |   |     |                |  |             |          | 465   |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         | 465    |  
|Tax benefit of disqualifying dispositions |                                                                                      |              |            |         |            |   |     |                |  |             | 383      |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 383     |       
|Amortization of unearned compensation     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   | 1,915  |        |   |   | 1,915   |       
|Dividends paid ($0.32 per share)          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   | (4,388       | )      |  |        |       |       |   |   |        |        |   |   | (4,388  | )     
|Comprehensive income:                     |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   |         |       
|                                          | Net income for the year                                                              |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              | 28,862 |  |        |       |       |   |   |        |        |   |   |         | 28,862 |  
|                                          | Translation adjustments (net of tax of $1,039)                                       |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | 1,477 |   |   |        |        |   |   |         | 1,477  |  
|                                          | Change in unrealized marketable securities gains and losses (net
    of tax of $196) |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       | (299  | ) |   |        |        |   |   |         | (299   | )
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Total Comprehensive Income                |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |       |       |   |   |        |        |   |   | 30,040  |       
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      
|Balance, July 31, 2005                    |                                                                                      |              | 13,804,064 |         |            | $ | 715 |                |  | $           | 52,793   |       |       |               |         |         |          |       |       |               |  | $ | 348,499      |        |  | $      | 3,319 |       |   | $ | (5,736 | )      |   | $ | 399,590 |       
|                                          |                                                                                      |              |            |         |            |   |     |                |  |             |          |       |       |               |          |         |          |       |        |               |  |   |              |        |  |        |      



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ANALOGIC CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS


(In thousands)


|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |         |        | 
|------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------ | - | ------- | ------- | ----- | - | ------- | ------- | ------ | 
|                                                                                      |                                                                                                     | Year Ended July 31,                        |        
|                                                                                      |                                                                                                     |                                            |        
|                                                                                      |                                                                                                     | 2005                                       |         |         | 2004   |   |         | 2003    |      
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|OPERATING ACTIVITIES:                                                                 |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |        
|Net income                                                                            |                                                                                                     | $                                          | 28,862  |         |        | $ | 8,354   |         |       | $ | 49,531  |        
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |        
|                                                                                      | Deferred income taxes                                                                               |                                            |         | (2,466  | )      |   |         | 397     |       |   |         | (106    | )     
|                                                                                      | Depreciation and amortization                                                                       |                                            |         | 20,513  |        |   |         | 20,830  |       |   |         | 19,149  |       
|                                                                                      | Allowance for doubtful accounts and notes receivables                                               |                                            |         | 432     |        |   |         | 110     |       |   |         | 3,908   |       
|                                                                                      | Asset impairment charges                                                                            |                                            |         | 6,599   |        |   |         |        |       |   |         |        |       
|                                                                                      | (Gain) loss on sale of property, plant and equipment                                                |                                            |         | 99      |        |   |         | 400     |       |   |         | (1,561  | )     
|                                                                                      | Equity (gain) loss in unconsolidated affiliates                                                     |                                            |         | (262    | )      |   |         | (577    | )     |   |         | 3,506   |       
|                                                                                      | Equity loss in unconsolidated affiliates classified as research
    and product development expense |                                            |         | 759     |        |   |         | 3,386   |       |   |         | 818     |       
|                                                                                      | Gain on sale of Cedara investment                                                                   |                                            |         | (43,829 | )      |   |         |        |       |   |         |        |       
|                                                                                      | Non-cash compensation from stock grants                                                             |                                            |         | 1,915   |        |   |         | 1,652   |       |   |         | 1,476   |       
|                                                                                      | Net changes in operating assets and liabilities (Note 19)                                           |                                            |         | 681     |        |   |         | (1,360  | )     |   |         | (41,358 | )     
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                             |                                                                                                     |                                            | 13,303  |         |        |   | 33,192  |         |       |   | 35,363  |        
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|INVESTING ACTIVITIES:                                                                 |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |        
|                                                                                      | Investments in and advances to affiliated companies                                                 |                                            |         | (2,326  | )      |   |         | (19     | )     |   |         | (6,035  | )     
|                                                                                      | Return of investment from affiliated company                                                        |                                            |         |        |        |   |         |        |       |   |         | 516     |       
|                                                                                      | Acquisition of businesses, net of cash acquired                                                     |                                            |         |        |        |   |         |        |       |   |         | (2,851  | )     
|                                                                                      | Acquisition of assets                                                                               |                                            |         |        |        |   |         | (1,750  | )     |   |         | (9,899  | )     
|                                                                                      | Proceeds from the sale of Cedara investment                                                         |                                            |         | 50,752  |        |   |         |        |       |   |         |        |       
|                                                                                      | Additions to property, plant and equipment                                                          |                                            |         | (11,043 | )      |   |         | (21,924 | )     |   |         | (16,388 | )     
|                                                                                      | Capitalized software                                                                                |                                            |         | (5,122  | )      |   |         | (4,832  | )     |   |         | (3,582  | )     
|                                                                                      | Proceeds from sale of property, plant and equipment                                                 |                                            |         | 129     |        |   |         | 182     |       |   |         | 3,285   |       
|                                                                                      | Maturities of marketable securities                                                                 |                                            |         | 14,255  |        |   |         | 13,165  |       |   |         | 16,825  |       
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES                                  |                                                                                                     |                                            | 46,645  |         |        |   | (15,178 | )       |       |   | (18,129 | )      
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|FINANCING ACTIVITIES:                                                                 |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |        
|                                                                                      | Payments on debt and capital lease obligations                                                      |                                            |         | (743    | )      |   |         | (5,100  | )     |   |         | (453    | )     
|                                                                                      | Issuance of stock pursuant to exercise of stock options and
    employee stock purchase plan        |                                            |         | 4,239   |        |   |         | 3,941   |       |   |         | 5,479   |       
|                                                                                      | Dividends paid to shareholders                                                                      |                                            |         | (4,388  | )      |   |         | (4,342  | )     |   |         | (4,275  | )     
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES                                  |                                                                                                     |                                            | (892    | )       |        |   | (5,501  | )       |       |   | 751     |        
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS                          |                                                                                                     |                                            | (489    | )       |        |   | 230     |         |       |   | (4,347  | )      
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                             |                                                                                                     |                                            | 58,567  |         |        |   | 12,743  |         |       |   | 13,638  |        
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                          |                                                                                                     |                                            | 149,549 |         |        |   | 136,806 |         |       |   | 123,168 |        
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|CASH AND CASH EQUIVALENTS, END OF YEAR                                                |                                                                                                     | $                                          | 208,116 |         |        | $ | 149,549 |         |       | $ | 136,806 |        
|                                                                                      |                                                                                                     |                                            |         |         |        |   |         |         |      
|Supplemental disclosure of cash flow information:                                     |                                                                                                     |                                            |         |         |        |   |         |         |       |   |         |        
|                                                                                      |                                                                                                     | Cash paid during the year for income taxes |         | $       | 13,033 |   |         | $       | 2,835 |   |         | $       | 27,215 | 
|                                                                                      |                                                                                                     | Cash paid during the year for interest     |         |         | 54     |   |         |         | 294   |   |         |         | 308    | 



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(In thousands except share and per share data)




|   |                                                                        
|-- | -----------------------------------------------------------------------
|1. | Summary of business operations and significant accounting
    policies:

Business operations:




Significant accounting policies:


(a) Principles of consolidation:




(b) Basis of presentation:




(c) Inventories:




(d) Property, plant and equipment:




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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|                                           |  |                                          |                | 
|------------------------------------------ |  | ---------------------------------------- | -------------- | 
|Buildings                                  |  |                                          | 35 to 40 years | 
|Property under capital lease               |  |                                          | 2 to 5 years   | 
|Manufacturing equipment                    |  |                                          | 4 to 7 years   | 
|Furniture, fixtures and computer equipment |  |                                          | 3 to 8 years   | 
|Leasehold improvements                     |  | shorter of useful life or the lease term
|Motor vehicles                             |  |                                          | 3 to 5 years   | 

(e) Revenue recognition and accounts
receivable:




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company recognizes the majority of its revenue in accordance
    with SEC Staff Accounting Bulletin No. 104,
    Revenue Recognition in Financial Statements.
    Revenue related to product sales is recognized upon shipment
    provided that title and risk of loss have passed to the
    customer, there is persuasive evidence of an arrangement, the
    sales price is fixed or determinable, collection of the related
    receivable is reasonably assured and customer acceptance
    criteria, if any, have been successfully demonstrated. For
    product sales with acceptance criteria that are not successfully
    demonstrated prior to shipment, revenue is recognized upon
    customer acceptance, provided all other revenue recognition
    criteria have been met. The Companys sales contracts
    generally provide for the customer to accept title and risk of
    loss when the product leaves the Companys facilities. When
    shipping terms or local laws do not allow for passage of title
    and risk of loss at the shipping point, the Company defers
    recognizing revenue until title and risk of loss transfer to the
    customer. The Company classifies shipping and handling costs in
    cost of sales.
|
| | The Companys transactions sometimes involve multiple
    elements (i.e., systems and services). Revenue under multiple
    element arrangements is recognized in accordance with Emerging
    Issues Task Force (EITF) Issue No. 00-21,
    Accounting for Revenue Arrangements with Multiple
    Deliverables. Under this method, if an element is
    determined to be a separate unit of accounting, the revenue for
    the element is based on fair value and determined by verifiable
    objective evidence, and recognized at the time of delivery. If
    the arrangement has an undelivered element, the Company ensures
    that they have objective and reliable evidence of the fair value
    of the undelivered element. Fair value is determined based upon
    the price charged when the element is sold separately.
    Maintenance or service revenues are recognized ratably over the
    life of the contracts.                                                                                                                                                                                                                                                                                                                       
|
| | For business units that sell software licenses or products in
    which the software is considered more than incidental, the
    Company recognizes revenue in accordance with the American
    Institute of Certified Public Accountants
    (AICPA)s Statement of Position 97-2,
    Software Revenue Recognition(SOP 97-2). The application of
    SOP 97-2 requires judgment, including whether a software
    arrangement includes multiple elements, and if so, whether
    vendor-specific objective evidence (VSOE) of fair
    value exists for those elements. License revenue is recognized
    upon delivery, provided that persuasive evidence of an
    arrangement exists, no significant obligations with regards to
    installation or implementation remain, fees are fixed or
    determinable, collectibility is probable, and customer
    acceptance, when applicable, is obtained. We allocate revenue
    first to the fair value of the undelivered elements and allocate
    the residual revenue to the delivered elements. Hardware and
    software maintenance is marketed under annual and multi-year
    arrangements and revenue is recognized ratably over the
    contracted maintenance term.                      

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As it relates to services, Camtronics may also provide services
    that vary depending on the scope and complexity requested by the
    customer. Examples of such services include additional database
    consulting, system configuration, project management,
    interfacing to existing systems, and network consulting.
    Services generally are not deemed to be essential to the
    functionality of the software. If Camtronics has VSOE for the
    services, the timing of the software license revenue is not
    impacted. If the Company does have VSOE, service revenue is
    recognized as the services are performed. Camtronics commonly
    performs services for which the Company does not have VSOE;
    accordingly, the software license revenue is deferred until the
    services are completed.
|
| | The Company provides engineering services to some of its
    customers on a contractual basis and recognizes revenue using
    the percentage of completion method. The Company estimates the
    percentage of completion on contracts with a fixed fee
    arrangement on a monthly basis utilizing costs incurred to date
    as a percentage of total estimated costs to complete the
    project. If the Company does not have a sufficient basis to
    measure progress towards completion, revenue is recognized upon
    completion of the contract. When total cost estimates exceed
    revenues, the Company accrues for the estimated losses
    immediately.                                                                                                                                                      
|
| | Deferred revenue is comprised of 1) license fee,
    maintenance and other service revenues for which payment has
    been received and for which services have not yet been performed
    and 2) revenues related to delivered components of a
    multiple-element arrangement for which VSOE of fair value has
    not been determined for components not yet delivered or accepted
    by the customer. Deferred costs represent costs related to these
    revenues; for example, costs of goods sold and services provided
    and sales commission expenses.                                                                                                                                                                                                                                                             
|
| | Revenue related to the hotel operations is recognized as
    services are performed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



(f) Capitalized software costs:


Accounting for the Costs of
Computer Software to be Sold, Leased, or Otherwise
Marketed.


(g) Warranty costs:




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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




(h) Research and product development costs:




(i) Income taxes:




(j) Net income per share:




(k) Cash and cash equivalents:




(l) Concentration of credit risk:




(m) Marketable securities:


Accounting
for Certain Investments in Debt and Equity Securities.


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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




(n) New accounting pronouncements:


Accounting Changes and Error Corrections. Accounting Changes, Reporting Accounting Changes in Interim Financial
Statements.










Application of EITF
No. 00-19 to Freestanding Financial Instruments Originally
Issued as Employee Compensation.


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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)


Inventory Costs


Application of FASB Statement
No. 109, Accounting for Income Taxes, to the Tax Deduction
on Qualified Production Activities by the American Jobs Creation
Act of 2004


The
Meaning of Other-Than-Temporary Impairment and Its Application
to Certain Investment.


(o) Use of estimates:




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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)


(p) Comprehensive income:


Reporting Comprehensive
Income,


(q) Stock-based compensation:


Accounting for Stock-Based
Compensation-Transition and Disclosure, and amendment of FASB
Statement No. 123. Accounting for Stock-Based
Compensation,






|                                                                                                                                                   |                      |                              |        |      |      |   |        |      |  |   |        |      | 
|-------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ---------------------------- | ------ | ---- | ---- | - | ------ | ---- |  | - | ------ | ---- | 
|                                                                                                                                                   |                      | Twelve Months Ended July 31, |       
|                                                                                                                                                   |                      |                              |       
|                                                                                                                                                   |                      | 2005                         |        |      | 2004 |   |        | 2003 | 
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|Net income, as reported                                                                                                                            |                      | $                            | 28,862 |      |      | $ | 8,354  |      |  | $ | 49,531 |     
|Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effect                                      |                      |                              | 1,137  |      |      |   | 1,366  |      |  |   | 937    |     
|Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effect |                      |                              | (3,795 | )    |      |   | (4,029 | )    |  |   | (3,724 | )   
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|Pro forma net income                                                                                                                               |                      | $                            | 26,204 |      |      | $ | 5,691  |      |  | $ | 46,744 |     
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|Earnings per share:                                                                                                                                |                      |                              |        |      |      |   |        |      |  |   |        |     
|                                                                                                                                                   | Basic, as reported   |                              | $      | 2.13 |      |   | $      | 0.62 |  |   | $      | 3.74 | 
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|                                                                                                                                                   | Basic, pro forma     |                              | $      | 1.93 |      |   | $      | 0.42 |  |   | $      | 3.53 | 
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|                                                                                                                                                   | Diluted, as reported |                              | $      | 2.12 |      |   | $      | 0.62 |  |   | $      | 3.70 | 
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 
|                                                                                                                                                   | Diluted, pro forma   |                              | $      | 1.92 |      |   | $      | 0.42 |  |   | $      | 3.49 | 
|                                                                                                                                                   |                      |                              |        |      |      |   |        |      | 

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)


( r) Fair value of financial
instruments:






|    |                                 
|--- | --------------------------------
|(s) | Impairment of long-lived assets:

(SFAS 144),
Accounting for the Impairment or Disposal of Long-Lived
Assets




|    |                     
|--- | --------------------
|(t) | Segment information:

Disclosures about Segments of an Enterprise and Related
Information, (SFAS 131)




|    |                                   
|--- | ----------------------------------
|(u) | Translation of foreign currencies:



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|   |                           
|-- | --------------------------
|2. | Assets impairment charges:



|                             |                           |                                                     |       |   |       | 
|---------------------------- | ------------------------- | --------------------------------------------------- | ----- | - | ----- | 
|                             |                           | Twelve Months Ended                                 |      
|                             |                           | July 31, 2005                                       |      
|                             |                           |                                                     |      
|Medical Technology Products: |                           |                                                     |       |  
|                             | Medical Imaging Products: |                                                     |       |   |      
|                             |                           | Investment in PhotoDetection Systems Inc.           |       | $ | 2,160 | 
|                             |                           | Capitalized software                                |       |   | 479   | 
|                             |                           | Intangible asset related to a manufacturing license |       |   | 361   | 
|                             |                           |                                                     |      
|                             |                           |                                                     | 3,000 |  
|                             |                           |                                                     |      
|                             | Camtronics:               |                                                     |       |   |      
|                             |                           | Goodwill                                            |       | $ | 434   | 
|                             |                           | Intangible asset                                    |       |   | 1,535 | 
|                             |                           | Investment in CardioWorks, Inc.                     |       |   | 1,630 | 
|                             |                           |                                                     |      
|                             |                           |                                                     | 3,599 |  
|                             |                           |                                                     |      
|Total                        |                           | $                                                   | 6,599 |  
|                             |                           |                                                     |      





| |                                          
| | -----------------------------------------
| | Investment in PhotoDetection Systems Inc.

Whether an Investor Should Apply the
Equity Method of Accounting to Investments Other Than Common
Stock Accounting for Certain Investments in Debt
and Equity Security




| |                     
| | --------------------
| | Capitalized software



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




| |                                                    
| | ---------------------------------------------------
| | Intangible asset related to a manufacturing license





| |         
| | --------
| | Goodwill

Goodwill and
Other Intangible Assets




| |                 
| | ----------------
| | Intangible asset





| |                                
| | -------------------------------
| | Investment in CardioWorks, Inc.



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)






|   |                         
|-- | ------------------------
|3. | Risks and Uncertainties:





| |          
| | ---------
| | Customers



|                                 |  |                     |     |  |      |  |     |      |  |  |     | 
|-------------------------------- |  | ------------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                 |  | Year Ended July 31, |    
|                                 |  |                     |    
|                                 |  | 2005                |     |  | 2004 |  |     | 2003 | 
|                                 |  |                     |     |  |      |  |     |      | 
|L-3 Communications               |  |                     | 14% |  |      |  | 8%  |      |  |  | 43% | 
|Toshiba                          |  |                     | 14% |  |      |  | 12% |      |  |  | 7%  | 
|General Electric                 |  |                     | 10% |  |      |  | 10% |      |  |  | 9%  | 
|Siemens                          |  |                     | 8%  |  |      |  | 9%  |      |  |  | 6%  | 
|Philips                          |  |                     | 6%  |  |      |  | 7%  |      |  |  | 4%  | 
|Ten largest customers as a group |  |                     | 61% |  |      |  | 61% |      |  |  | 77% | 







| |                                          
| | -----------------------------------------
| | Suppliers of Raw Materials and Components





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##### Table of Contents



ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)








| |                                                                 
| | ----------------------------------------------------------------
| | United States or Foreign Regulatory Clearances and
    Approvals





|   |                       
|-- | ----------------------
|4. | Acquisition of assets:



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|   |                       
|-- | ----------------------
|5. | Marketable securities:



|                                                                                  |  |                  |        |  |      |   |     |      |  |            |   |  |  |   |        | 
|--------------------------------------------------------------------------------- |  | ---------------- | ------ |  | ---- | - | --- | ---- |  | ---------- | - |  |  | - | ------ | 
|                                                                                  |  | Gross Unrealized |       
|                                                                                  |  |                  |       
|                                                                                  |  | Cost             |        |  | Gain |   |     | Loss |  | Fair Value |  
|                                                                                  |  |                  |        |  |      |   |     |      |  |            |  
|July 31, 2005                                                                     |  |                  |        |  |      |   |     |      |  |            |   |  |  |   |        | 
|Debt securities issued by various state and local municipalities
    and agencies |  | $                | 12,145 |  |      | $ | 193 |      |  | $          |  |  |  | $ | 12,338 | 
|                                                                                 
|July 31, 2004                                                                     |  |                  |        |  |      |   |     |      |  |            |   |  |  |   |        | 
|Debt securities issued by various state and local municipalities
    and agencies |  | $                | 26,400 |  |      | $ | 688 |      |  | $          |  |  |  | $ | 27,088 | 



|                 |                                       |                       |   |       |        |  |   |       |        | 
|---------------- | ------------------------------------- | --------------------- | - | ----- | ------ |  | - | ----- | ------ | 
|                 |                                       |                       |   | Fair  |       
|                 |                                       | Cost                  |   |       | Value  | 
|                 |                                       |                       |   |       |        | 
|Debt securities: |                                       |                       |   |       |        |  |   |      
|                 | Due in one year or less               |                       | $ | 6,345 |        |  | $ | 6,379 |       
|                 | Due after one year through five years |                       |   | 5,800 |        |  |   | 5,959 |       
|                 |                                       |                       |   |       |        | 
|                 |                                       | Total debt securities |   | $     | 12,145 |  |   | $     | 12,338 | 
|                 |                                       |                       |   |       |        | 





|   |                                                                          
|-- | -------------------------------------------------------------------------
|6. | Explosive Assessment Computed Tomography (EXACT)
    Systems Agreement:









57



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)






|   |                           
|-- | --------------------------
|7. | Balance sheet information:



|                               |                                                |          |         |          |      |   |         |          |  
|------------------------------ | ---------------------------------------------- | -------- | ------- | -------- | ---- | - | ------- | -------- | -
|                               |                                                | July 31, |        
|                               |                                                |          |        
|                               |                                                | 2005     |         |          | 2004 |  
|                               |                                                |          |         |          |      |  
|Inventories:                   |                                                |          |         |          |      |   |         |         
|                               | Raw materials                                  |          | $       | 40,850   |      |   | $       | 36,246   |  
|                               | Work-in-process                                |          |         | 15,453   |      |   |         | 12,400   |  
|                               | Finished goods                                 |          |         | 13,723   |      |   |         | 17,306   |  
|                               |                                                |          |         |          |      |  
|                               |                                                | $        | 70,026  |          |      | $ | 65,952  |         
|                               |                                                |          |         |          |      |  
|Property, plant and equipment: |                                                |          |         |          |      |   |         |         
|                               | Land and land improvements                     |          | $       | 7,209    |      |   | $       | 7,013    |  
|                               | Buildings and improvements                     |          |         | 75,191   |      |   |         | 74,737   |  
|                               | Property under capital lease                   |          |         | 641      |      |   |         | 2,199    |  
|                               | Leasehold and capital lease improvements       |          |         | 3,228    |      |   |         | 2,822    |  
|                               | Manufacturing equipment                        |          |         | 112,439  |      |   |         | 107,766  |  
|                               | Furniture, fixtures and computer equipment     |          |         | 56,369   |      |   |         | 53,759   |  
|                               | Motor vehicles                                 |          |         | 1,075    |      |   |         | 583      |  
|                               |                                                |          |         |          |      |  
|                               |                                                |          | 256,152 |          |      |   | 248,879 |         
|                               | Less accumulated depreciation and amortization |          |         | (168,598 | )    |   |         | (157,802 | )
|                               |                                                |          |         |          |      |  
|                               |                                                | $        | 87,554  |          |      | $ | 91,077  |         
|                               |                                                |          |         |          |      |  

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|                                           |  |          |        |  |      |   |        | 
|------------------------------------------ |  | -------- | ------ |  | ---- | - | ------ | 
|                                           |  | July 31, |       
|                                           |  |          |       
|                                           |  | 2005     |        |  | 2004 |  
|                                           |  |          |        |  |      |  
|Accrued liabilities:                       |  |          |        |  |      |   |        | 
|Accrued employee compensation and benefits |  | $        | 11,684 |  |      | $ | 11,247 | 
|Accrued warranty                           |  |          | 4,794  |  |      |   | 5,039  | 
|Other                                      |  |          | 5,966  |  |      |   | 5,094  | 
|                                           |  |          |        |  |      |  
|                                           |  | $        | 22,444 |  |      | $ | 21,380 | 
|                                           |  |          |        |  |      |  
|Advance payments:                          |  |          |        |  |      |   |        | 
|Long-lead-time components(A)               |  | $        | 6,170  |  |      | $ | 1,500  | 
|Ramp-up funds                              |  |          | 475    |  |      |   | 1,849  | 
|Customer deposit                           |  |          | 3,578  |  |      |   | 2,776  | 
|                                           |  |          |        |  |      |  
|                                           |  | $        | 10,223 |  |      | $ | 6,125  | 
|                                           |  |          |        |  |      |  



|    |  |                                                                                                                                                                 
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Long-lead time components increase represents advance payments
    received from L-3 Communications based on orders received
    for the Companys EXACT system.



|   |                                
|-- | -------------------------------
|8. | Goodwill and intangible assets:

Goodwill and Other
Intangible Assets






|                                     |  |            |        |   |            |  |   |       |  |   |        |  
|------------------------------------ |  | ---------- | ------ | - | ---------- |  | - | ----- |  | - | ------ | -
|                                     |  | Medical    |        |   | Security   |  |   |      
|                                     |  | Technology |        |   | Technology |  |   |      
|                                     |  | Products   |        |   | Products   |  |   | Total | 
|                                     |  |            |        |   |            |  |   |       | 
|Balance at July 31, 2003             |  | $          | 2,306  |   |            |  |  |       |  | $ | 2,306  |  
|Goodwill reclassed during the year   |  |            | (1,560 | ) |            |  |  |       |  |   | (1,560 | )
|Goodwill acquired during the year    |  |            | 819    |   |            |  |  |       |  |   | 819    |  
|                                     |  |            |        |   |            |  |   |       | 
|Balance at July 31, 2004             |  | $          | 1,565  |   |            |  |  |       |  | $ | 1,565  |  
|                                     |  |            |        |   |            |  |   |       | 
|Goodwill written off during the year |  |            | (819   | ) |            |  |  |       |  |   | (819   | )
|                                     |  |            |        |   |            |  |   |       | 
|Balance at July 31, 2005             |  | $          | 746    |   |            |  |  |       |  | $ | 746    |  
|                                     |  |            |        |   |            |  |   |       | 



59



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)








|                               |                       |               |        |             |               |   |       |       |  |   |             |       |  |              |        |       |     |   |       |       |  |   |       |       | 
|------------------------------ | --------------------- | ------------- | ------ | ----------- | ------------- | - | ----- | ----- |  | - | ----------- | ----- |  | ------------ | ------ | ----- | --- | - | ----- | ----- |  | - | ----- | ----- | 
|                               |                       | July 31, 2005 |        |             | July 31, 2004 |  
|                               |                       |               |        |             |               |  
|                               |                       |               |        | Accumulated |               |   |       |       |  |   | Accumulated |       |  |             
|                               |                       | Cost          |        |             | Amortization  |   |       | Net   |  |   | Cost        |       |  | Amortization |        |       | Net |  
|                               |                       |               |        |             |               |   |       |       |  |   |             |       |  |              |        |       |     |  
|Amortizable Intangible Assets: |                       |               |        |             |               |   |       |       |  |   |             |       |  |              |        |       |     |   |       |       |  |   |       |      
|                               | Software Technology   |               | $      | 2,312       |               |   | $     | 1,859 |  |   | $           | 453   |  |              | $      | 4,805 |     |   | $     | 2,028 |  |   | $     | 2,777 | 
|                               | Intellectual Property |               |        | 8,364       |               |   |       | 4,676 |  |   |             | 3,688 |  |              |        | 8,364 |     |   |       | 3,118 |  |   |       | 5,246 | 
|                               | Customer list         |               |        | 1,476       |               |   |       | 646   |  |   |             | 830   |  |              |        | 1,476 |     |   |       | 276   |  |   |       | 1,200 | 
|                               |                       |               |        |             |               |   |       |       |  |   |             |       |  |              |        |       |     |  
|                               |                       | $             | 12,152 |             |               | $ | 7,181 |       |  | $ | 4,971       |       |  | $            | 14,645 |       |     | $ | 5,422 |       |  | $ | 9,223 |      
|                               |                       |               |        |             |               |   |       |       |  |   |             |       |  |              |        |       |     |  





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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|     |  |   |       | 
|---- |  | - | ----- | 
|2006 |  | $ | 2,461 | 
|2007 |  |   | 2,008 | 
|2008 |  |   | 502   | 
|     |  |   |      
|     |  | $ | 4,971 | 
|     |  |   |      



|   |                                                     
|-- | ----------------------------------------------------
|9. | Investments in and advances to affiliated companies:



Whether an Investor Should Apply the
Equity Method of Accounting to Investments Other Than Common
Stock Accounting for Certain Investments in Debt
and Equity Security


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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)








|                       |  |      |        |  |      |   |         | 
|---------------------- |  | ---- | ------ |  | ---- | - | ------- | 
|                       |  | 2005 |        |  | 2004 |  
|                       |  |      |        |  |      |  
|Current assets         |  | $    | 32,426 |  |      | $ | 75,476  | 
|Noncurrent assets      |  |      | 20,141 |  |      |   | 31,943  | 
|                       |  |      |        |  |      |  
|                       |  | $    | 52,567 |  |      | $ | 107,419 | 
|                       |  |      |        |  |      |  
|Current liabilities    |  | $    | 33,454 |  |      | $ | 37,132  | 
|Noncurrent liabilities |  |      |       |  |      |   | 33      | 
|                       |  |      |        |  |      |  
|                       |  | $    | 33,454 |  |      | $ | 37,165  | 
|                       |  |      |        |  |      |  

|                              |  |      |        |  |      |   |        |      |  |   |         |  
|----------------------------- |  | ---- | ------ |  | ---- | - | ------ | ---- |  | - | ------- | -
|                              |  | 2005 |        |  | 2004 |   |        | 2003 | 
|                              |  |      |        |  |      |   |        |      | 
|Net revenue                   |  | $    | 48,916 |  |      | $ | 57,344 |      |  | $ | 38,195  |  
|Gross margin                  |  |      | 28,274 |  |      |   | 36,771 |      |  |   | 19,280  |  
|Income (loss) from operations |  |      | 2,426  |  |      |   | 6,002  |      |  |   | (12,787 | )
|Net income (loss)             |  |      | 2,717  |  |      |   | 6,527  |      |  |   | (11,766 | )





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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|    |                      
|--- | ---------------------
|10. | Net income per share:



|                                                                   |                                                           |      |            |         |      |   |            |         |  |   |            |         | 
|------------------------------------------------------------------ | --------------------------------------------------------- | ---- | ---------- | ------- | ---- | - | ---------- | ------- |  | - | ---------- | ------- | 
|                                                                   |                                                           | 2005 |            |         | 2004 |   |            | 2003    | 
|                                                                   |                                                           |      |            |         |      |   |            |         | 
|Net income                                                         |                                                           | $    | 28,862     |         |      | $ | 8,354      |         |  | $ | 49,531     |        
|                                                                   |                                                           |      |            |         |      |   |            |         | 
|Weighted average number of common shares outstanding 
    Basic   |                                                           |      | 13,565,582 |         |      |   | 13,463,105 |         |  |   | 13,250,750 |        
|Effect of dilutive securities:                                     |                                                           |      |            |         |      |   |            |         |  |   |            |        
|                                                                   | Stock options and restricted stock                        |      |            | 53,578  |      |   |            | 56,208  |  |   |            | 143,471 | 
|                                                                   |                                                           |      |            |         |      |   |            |         | 
|Weighted average number of common shares outstanding 
    Diluted |                                                           |      | 13,619,160 |         |      |   | 13,519,313 |         |  |   | 13,394,221 |        
|                                                                   |                                                           |      |            |         |      |   |            |         | 
|Net income per common share:                                       |                                                           |      |            |         |      |   |            |         |  |   |            |        
|                                                                   | Basic                                                     |      | $          | 2.13    |      |   | $          | 0.62    |  |   | $          | 3.74    | 
|                                                                   | Diluted                                                   |      |            | 2.12    |      |   |            | 0.62    |  |   |            | 3.70    | 
|                                                                   | Anti-dilutive shares related to outstanding stock options |      |            | 269,765 |      |   |            | 154,397 |  |   |            | 74,600  | 





|    |                            
|--- | ---------------------------
|11. | Commitments and guarantees:



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




63



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)








|                                                                               |  |          |        |   |      |   |        |  
|------------------------------------------------------------------------------ |  | -------- | ------ | - | ---- | - | ------ | -
|                                                                               |  | July 31, |       
|                                                                               |  |          |       
|                                                                               |  | 2005     |        |   | 2004 |  
|                                                                               |  |          |        |   |      |  
|Balance at the beginning of the period                                         |  | $        | 5,039  |   |      | $ | 7,302  |  
|Accrual for warranties issued during the period                                |  |          | 3,642  |   |      |   | 4,788  |  
|Accrual related to pre-existing warranties (including changes in
    estimate) |  |          | 1,920  |   |      |   | (2,459 | )
|Settlements made in cash or in kind during the period                          |  |          | (5,807 | ) |      |   | (4,592 | )
|                                                                               |  |          |        |   |      |  
|Balance at the end of the period                                               |  | $        | 4,794  |   |      | $ | 5,039  |  
|                                                                               |  |          |        |   |      |  





|    |               
|--- | --------------
|12. | Notes payable:



|                                                                                                           |  |          |    |  |      |   |     | 
|---------------------------------------------------------------------------------------------------------- |  | -------- | -- |  | ---- | - | --- | 
|                                                                                                           |  | July 31, |   
|                                                                                                           |  |          |   
|                                                                                                           |  | 2005     |    |  | 2004 |  
|                                                                                                           |  |          |    |  |      |  
|Non-interest bearing note payable paid October 2004 for the
    acquisition of certain assets from Quinton |  | $        |   |  |      | $ | 743 | 
|Other non-interest bearing note payable                                                                    |  |          | 42 |  |      |   | 42  | 
|                                                                                                           |  |          |    |  |      |  
|                                                                                                           |  |          | 42 |  |      |   | 785 | 
|Less current portion                                                                                       |  |          | 42 |  |      |   | 785 | 
|                                                                                                           |  |          |    |  |      |  
|                                                                                                           |  | $        |   |  |      | $ |    | 
|                                                                                                           |  |          |    |  |      |  





|    |                              
|--- | -----------------------------
|13. | Leases and other commitments:



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)






|                                                                               |  |                  |     |   |              |   |       | 
|------------------------------------------------------------------------------ |  | ---------------- | --- | - | ------------ | - | ----- | 
|                                                                               |  | Operating Leases |    
|                                                                               |  |                  |    
|Fiscal Year                                                                    |  | Capital Leases   |     |   | Other Leases |  
|                                                                               |  |                  |     |   |              |  
|2006                                                                           |  | $                | 110 |   |              | $ | 1,663 | 
|2007                                                                           |  |                  | 35  |   |              |   | 1,363 | 
|2008                                                                           |  |                  | 27  |   |              |   | 1,208 | 
|2009                                                                           |  |                  |    |   |              |   | 1,022 | 
|2010                                                                           |  |                  |    |   |              |   | 798   | 
|Thereafter                                                                     |  |                  |    |   |              |   | 1,853 | 
|                                                                               |  |                  |     |   |              |  
|                                                                               |  |                  | 172 |   |              | $ | 7,907 | 
|                                                                               |  |                  |     |   |              |  
|Less amount representing interest at 5.9%-16.2%                                |  |                  | (10 | ) |              |   |       | 
|                                                                               |  |                  |     |   |              |  
|Present value of minimum lease payments (includes current
    portion of $104) |  | $                | 162 |   |              |   |       | 
|                                                                               |  |                  |     |   |              |  



|    |                        
|--- | -----------------------
|14. | Other (income) expense:





|    |                                    
|--- | -----------------------------------
|15. | Stock option and stock bonus plans:







65



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)










|                                      |  |           |       |  |        |  |          |           |  |   |        |          |  |           |         |   |        |   |       |  |  |  |          |  
|------------------------------------- |  | --------- | ----- |  | ------ |  | -------- | --------- |  | - | ------ | -------- |  | --------- | ------- | - | ------ | - | ----- |  |  |  | -------- | -
|                                      |  | 2005      |       |  | 2004   |  |          | 2003      | 
|                                      |  |           |       |  |        |  |          |           | 
|                                      |  | Weighted  |       |  |        |  | Weighted |           |  |   |        | Weighted |  |           |        
|                                      |  | Average   |       |  | Number |  |          | Average   |  |   | Number |          |  | Average   |         |   | Number |  
|                                      |  | Price per |       |  | of     |  |          | Price per |  |   | of     |          |  | Price per |         |   | of     |  
|                                      |  | Share     |       |  | Shares |  |          | Share     |  |   | Shares |          |  | Share     |         |   | Shares |  
|                                      |  |           |       |  |        |  |          |           |  |   |        |          |  |           |         |   |        |  
|Options outstanding beginning of year |  | $         | 41.14 |  |        |  | 736,024  |           |  | $ | 39.99  |          |  |           | 796,331 |   |        | $ | 37.39 |  |  |  | 803,360  |  
|Options granted at fair value         |  |           | 41.53 |  |        |  | 117,400  |           |  |   | 45.20  |          |  |           | 109,050 |   |        |   | 45.72 |  |  |  | 198,900  |  
|Options exercised                     |  |           | 36.86 |  |        |  | (102,350 | )         |  |   | 35.65  |          |  |           | (95,507 | ) |        |   | 34.15 |  |  |  | (149,730 | )
|Options cancelled                     |  |           | 42.47 |  |        |  | (72,750  | )         |  |   | 41.84  |          |  |           | (73,850 | ) |        |   | 38.76 |  |  |  | (56,199  | )
|                                      |  |           |       |  |        |  |          |           |  |   |        |          |  |           |         |   |        |  
|Options outstanding end of year       |  |           | 41.71 |  |        |  | 678,324  |           |  |   | 41.14  |          |  |           | 736,024 |   |        |   | 39.99 |  |  |  | 796,331  |  
|                                      |  |           |       |  |        |  |          |           |  |   |        |          |  |           |         |   |        |  
|Options exercisable end of year       |  |           | 39.93 |  |        |  | 252,915  |           |  |   | 38.25  |          |  |           | 211,241 |   |        |   | 36.86 |  |  |  | 165,509  |  
|                                      |  |           |       |  |        |  |          |           |  |   |        |          |  |           |         |   |        |  



|                |  |                     |         |               |              |  |                     |                |  |        |               |  |  |                |         |  |  |   |       | 
|--------------- |  | ------------------- | ------- | ------------- | ------------ |  | ------------------- | -------------- |  | ------ | ------------- |  |  | -------------- | ------- |  |  | - | ----- | 
|                |  | Options Outstanding |         |               |              |  |                    
|                |  |                     |         |               |              |  | Options Exercisable |               
|                |  |                     |         | Weighted Avg. |              |  |                     |                |  |       
|                |  | Number              |         |               | Remaining    |  |                     |                |  | Number |               |  | 
|Range of        |  | Outstanding         |         |               | Contractual  |  |                     | Weighted Avg.  |  |        | Exercisable   |  |  | Weighted Avg.  |        
|Exercise Prices |  | as of 7/31/05       |         |               | Life (Years) |  |                     | Exercise Price |  |        | as of 7/31/05 |  |  | Exercise Price |        
|                |  |                     |         |               |              |  |                     |                |  |        |               |  |  |                |        
|$27.75-$40.39   |  |                     | 233,490 |               |              |  | 3.00                |                |  | $      | 36.83         |  |  |                | 121,722 |  |  | $ | 35.45 | 
|$40.95-$42.04   |  |                     | 178,500 |               |              |  | 5.77                |                |  | $      | 41.33         |  |  |                | 24,751  |  |  | $ | 41.19 | 
|$42.48-$47.00   |  |                     | 173,184 |               |              |  | 4.07                |                |  | $      | 43.73         |  |  |                | 91,674  |  |  | $ | 43.63 | 
|$48.79-$52.20   |  |                     | 93,150  |               |              |  | 5.25                |                |  | $      | 50.88         |  |  |                | 14,768  |  |  | $ | 51.77 | 
|                |  |                     |         |               |              |  |                     |                |  |        |               |  |  |                |        
|$27.75-$52.20   |  |                     | 678,324 |               |              |  | 4.31                |                |  | $      | 41.71         |  |  |                | 252,915 |  |  | $ | 39.93 | 
|                |  |                     |         |               |              |  |                     |                |  |        |               |  |  |                |        



66



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|                         |  |                      |      |   |      |  |      |      |  |  |      |  
|------------------------ |  | -------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                         |  | Years Ended July 31, |     
|                         |  |                      |     
|                         |  | 2005                 |      |   | 2004 |  |      | 2003 | 
|                         |  |                      |      |   |      |  |      |      | 
|Expected life (in years) |  |                      | 5    |   |      |  | 6    |      |  |  | 6    |  
|Volatility               |  |                      | 39   | % |      |  | 35   | %    |  |  | 38   | %
|Risk-free interest rate  |  |                      | 3.32 | % |      |  | 3.57 | %    |  |  | 3.05 | %
|Dividend yield           |  |                      | .8   | % |      |  | .7   | %    |  |  | .6   | %



|    |                  
|--- | -----------------
|16. | Retirement Plans:









|    |              
|--- | -------------
|17. | Income taxes:



|                                 |         |          |        |        |      |   |       |       |   |   |        |        |  
|-------------------------------- | ------- | -------- | ------ | ------ | ---- | - | ----- | ----- | - | - | ------ | ------ | -
|                                 |         | July 31, |       
|                                 |         |          |       
|                                 |         | 2005     |        |        | 2004 |   |       | 2003  |  
|                                 |         |          |        |        |      |   |       |       |  
|Current income taxes:            |         |          |        |        |      |   |       |       |   |   |        |       
|                                 | Federal |          | $      | 18,403 |      |   | $     | 539   |   |   | $      | 23,980 |  
|                                 | State   |          |        | 1,604  |      |   |       | 304   |   |   |        | 4,712  |  
|                                 | Foreign |          |        | 571    |      |   |       | 1,545 |   |   |        | 2,083  |  
|                                 |         |          |        |        |      |   |       |       |  
|                                 |         |          | 20,578 |        |      |   | 2,388 |       |   |   | 30,775 |       
|                                 |         |          |        |        |      |   |       |       |  
|Deferred income taxes (benefit): |         |          |        |        |      |   |       |       |   |   |        |       
|                                 | Federal |          |        | (5,967 | )    |   |       | 634   |   |   |        | (1,842 | )
|                                 | State   |          |        | (476   | )    |   |       | (614  | ) |   |        | (89    | )
|                                 | Foreign |          |        | 274    |      |   |       | (661  | ) |   |        | (618   | )
|                                 |         |          |        |        |      |   |       |       |  
|                                 |         |          | (6,169 | )      |      |   | (641  | )     |   |   | (2,549 | )     
|                                 |         |          |        |        |      |   |       |       |  
|                                 |         | $        | 14,409 |        |      | $ | 1,747 |       |   | $ | 28,226 |       
|                                 |         |          |        |        |      |   |       |       |  

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|         |  |          |        |   |      |   |        |      |  |   |        |  
|-------- |  | -------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|         |  | July 31, |       
|         |  |          |       
|         |  | 2005     |        |   | 2004 |   |        | 2003 | 
|         |  |          |        |   |      |   |        |      | 
|Domestic |  | $        | 47,038 |   |      | $ | 13,583 |      |  | $ | 84,102 |  
|Foreign  |  |          | (3,767 | ) |      |   | (3,482 | )    |  |   | (6,345 | )
|         |  |          |        |   |      |   |        |      | 
|         |  | $        | 43,271 |   |      | $ | 10,101 |      |  | $ | 77,757 |  
|         |  |          |        |   |      |   |        |      | 



|                                     |  |              |        |   |              |   |        | 
|------------------------------------ |  | ------------ | ------ | - | ------------ | - | ------ | 
|                                     |  | Deferred Tax |        |   | Deferred Tax |  
|July 31, 2005                        |  | Assets       |        |   | Liabilities  |  
|                                     |  |              |        |   |              |  
|Deferred revenue                     |  | $            | 1,104  |   |              | $ |       | 
|Intangibles                          |  |              | 2,309  |   |              |   | 350    | 
|Depreciation                         |  |              |       |   |              |   | 4,497  | 
|Bad debt                             |  |              | 685    |   |              |   |       | 
|Capitalized interest and other costs |  |              | 120    |   |              |   | 180    | 
|Inventory                            |  |              | 3,740  |   |              |   |       | 
|Warranty                             |  |              | 1,673  |   |              |   |       | 
|Benefit plans                        |  |              | 2,403  |   |              |   |       | 
|State tax credit carryforwards       |  |              | 754    |   |              |   |       | 
|Unrealized equity gain/loss          |  |              | 7,471  |   |              |   | 2,044  | 
|Capitalized software, net            |  |              |       |   |              |   | 4,555  | 
|U.S. net operating loss              |  |              | 5,393  |   |              |   |       | 
|Foreign net operating loss           |  |              | 4,527  |   |              |   |       | 
|Comprehensive income                 |  |              |       |   |              |   | 167    | 
|Miscellaneous                        |  |              | 531    |   |              |   |       | 
|                                     |  |              |        |   |              |  
|                                     |  |              | 30,710 |   |              |   | 11,793 | 
|Valuation allowance                  |  |              | (3,864 | ) |              |   |       | 
|                                     |  |              |        |   |              |  
|                                     |  | $            | 26,846 |   |              | $ | 11,793 | 
|                                     |  |              |        |   |              |  

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)


|                                     |  |              |        |   |              |   |        | 
|------------------------------------ |  | ------------ | ------ | - | ------------ | - | ------ | 
|                                     |  | Deferred Tax |        |   | Deferred Tax |  
|July 31, 2004                        |  | Assets       |        |   | Liabilities  |  
|                                     |  |              |        |   |              |  
|Deferred revenue                     |  | $            | 4,075  |   |              | $ |       | 
|Intangibles                          |  |              | 983    |   |              |   | 1,588  | 
|Depreciation                         |  |              |       |   |              |   | 5,171  | 
|Bad debt                             |  |              | 837    |   |              |   |       | 
|Capitalized interest and other costs |  |              | 394    |   |              |   | 242    | 
|Inventory                            |  |              | 3,278  |   |              |   |       | 
|Warranty                             |  |              | 1,801  |   |              |   |       | 
|Benefit plans                        |  |              | 2,512  |   |              |   |       | 
|Lease transactions                   |  |              | 1,022  |   |              |   |       | 
|Unrealized equity gain/loss          |  |              | 6,603  |   |              |   | 2,501  | 
|Capitalized software, net            |  |              |       |   |              |   | 3,549  | 
|Foreign net operating loss           |  |              | 5,421  |   |              |   |       | 
|Capital loss carryforwards           |  |              | 140    |   |              |   |       | 
|Comprehensive income                 |  |              |       |   |              |   | 1,402  | 
|Miscellaneous                        |  |              | 578    |   |              |   |       | 
|                                     |  |              |        |   |              |  
|                                     |  |              | 27,644 |   |              |   | 14,453 | 
|Valuation allowance                  |  |              | (3,287 | ) |              |   |       | 
|                                     |  |              |        |   |              |  
|                                     |  | $            | 24,357 |   |              | $ | 14,453 | 
|                                     |  |              |        |   |              |  



|                                               |  |                     |    |   |      |  |    |      |  |  |    |  
|---------------------------------------------- |  | ------------------- | -- | - | ---- |  | -- | ---- |  |  | -- | -
|                                               |  | Year Ended July 31, |   
|                                               |  |                     |   
|                                               |  | 2005                |    |   | 2004 |  |    | 2003 | 
|                                               |  |                     |    |   |      |  |    |      | 
|U.S. federal statutory tax rate                |  |                     | 35 | % |      |  | 35 | %    |  |  | 35 | %
|Export sales benefit                           |  |                     | (1 | ) |      |  | (7 | )    |  |  | (1 | )
|State income taxes, net of federal tax benefit |  |                     | 3  |   |      |  | (5 | )    |  |  | 4  |  
|Tax exempt interest                            |  |                     | (1 | ) |      |  | (5 | )    |  |  | (1 | )
|General business credit                        |  |                     | (2 | ) |      |  | (6 | )    |  |  | (2 | )
|Valuation allowance                            |  |                     | 3  |   |      |  | 9  |      |  |  | 1  |  
|Effect of international operations             |  |                     | (3 | ) |      |  | (5 | )    |  |  | (1 | )
|Increase (decrease) in tax reserves            |  |                     | (1 | ) |      |  |   |      |  |  | 1  |  
|Other items, net                               |  |                     |   |   |      |  | 1  |      |  |  |   |  
|                                               |  |                     |    |   |      |  |    |      | 
|Effective tax rate                             |  |                     | 33 | % |      |  | 17 | %    |  |  | 36 | %
|                                               |  |                     |    |   |      |  |    |      | 





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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)












|    |                                             
|--- | --------------------------------------------
|18. | Quarterly results of operations (unaudited):



|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |       |      |  |   |       |      | 
|------------- | ----- | -------- | ------- | ------- | ------ | - | ------ | ---------- |  | ---------- | ----------- | ------ | ---------- | ----- | ----- | ---- |  | - | ----- | ---- | 
|              |       |          |         |         |        |   |        | Basic Net  |  |            | Diluted Net |       
|              |       | Total    |         |         | Gross  |   |        |            |  | Income per |             |        | Income per |      
|              |       | Revenues |         |         | Margin |   |        | Net Income |  |            | Share       |        |            | Share |      
|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |      
|2005 Quarters |       |          |         |         |        |   |        |            |  |            |             |        |            |       |       |      |  |   |       |     
|First         |       | $        | 84,091  |         |        | $ | 31,452 |            |  | $          | 165         |        |            | $     | 0.01  |      |  | $ | 0.01  |     
|Second        |       |          | 84,316  |         |        |   | 32,062 |            |  |            | (3,710      | )      |            |       | (0.27 | )    |  |   | (0.27 | )   
|Third         |       |          | 94,166  |         |        |   | 35,982 |            |  |            | 28,120      |        |            |       | 2.07  |      |  |   | 2.07  |     
|Fourth        |       |          | 101,998 |         |        |   | 40,527 |            |  |            | 4,287       |        |            |       | 0.32  |      |  |   | 0.31  |     
|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |      
|              | Total |          | $       | 364,571 |        |   | $      | 140,023    |  |            | $           | 28,862 |            |       | $     | 2.13 |  |   | $     | 2.12 | 
|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |      
|2004 Quarters |       |          |         |         |        |   |        |            |  |            |             |        |            |       |       |      |  |   |       |     
|First         |       | $        | 71,709  |         |        | $ | 29,021 |            |  | $          | (1,601      | )      |            | $     | (0.12 | )    |  | $ | (0.12 | )   
|Second        |       |          | 92,641  |         |        |   | 39,536 |            |  |            | 4,911       |        |            |       | 0.37  |      |  |   | 0.37  |     
|Third         |       |          | 88,972  |         |        |   | 34,267 |            |  |            | 1,140       |        |            |       | 0.08  |      |  |   | 0.08  |     
|Fourth        |       |          | 102,235 |         |        |   | 38,463 |            |  |            | 3,904       |        |            |       | 0.29  |      |  |   | 0.29  |     
|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |      
|              | Total |          | $       | 355,557 |        |   | $      | 141,287    |  |            | $           | 8,354  |            |       | $     | 0.62 |  |   | $     | 0.62 | 
|              |       |          |         |         |        |   |        |            |  |            |             |        |            |       |      

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|    |                                                  
|--- | -------------------------------------------------
|19. | Supplemental disclosure of cash flow information:



|                                                |  |              |        |   |      |   |        |      |  |   |         |  
|----------------------------------------------- |  | ------------ | ------ | - | ---- | - | ------ | ---- |  | - | ------- | -
|                                                |  | Fiscal Years |       
|                                                |  |              |       
|                                                |  | 2005         |        |   | 2004 |   |        | 2003 | 
|                                                |  |              |        |   |      |   |        |      | 
|Accounts and notes receivable                   |  | $            | (1,303 | ) |      | $ | (1,581 | )    |  | $ | 7,629   |  
|Accounts receivable from affiliates             |  |              | 267    |   |      |   | (52    | )    |  |   | 1,542   |  
|Inventories                                     |  |              | (3,798 | ) |      |   | 4,552  |      |  |   | (574    | )
|Costs related to deferred revenue               |  |              | (128   | ) |      |   | 2,937  |      |  |   | (4,212  | )
|Other current assets                            |  |              | (1,295 | ) |      |   | (259   | )    |  |   | 2,194   |  
|Other assets                                    |  |              | (5,668 | ) |      |   | 2,652  |      |  |   | (4,886  | )
|Accounts payable, trade                         |  |              | 899    |   |      |   | (769   | )    |  |   | (4,793  | )
|Accrued liabilities                             |  |              | 525    |   |      |   | (3,760 | )    |  |   | 6,054   |  
|Advance payments and deferred revenue           |  |              | 5,075  |   |      |   | (5,108 | )    |  |   | (46,971 | )
|Accrued income taxes                            |  |              | 6,107  |   |      |   | 28     |      |  |   | 2,659   |  
|                                                |  |              |        |   |      |   |        |      | 
|Net changes in operating assets and liabilities |  | $            | 681    |   |      | $ | (1,360 | )    |  | $ | (41,358 | )
|                                                |  |              |        |   |      |   |        |      | 



|    |                                    
|--- | -----------------------------------
|20. | Segment and geographic information:



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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|                                   |                                                      |                             |         |         |         |   |         |         |         |   |         |         |         |  
|---------------------------------- | ---------------------------------------------------- | --------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                   |                                                      | Years Ended July 31,        |        
|                                   |                                                      |                             |        
|                                   |                                                      | 2005                        |         |         | 2004    |   |         | 2003    |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|Revenues:                          |                                                      |                             |         |         |         |   |         |         |         |   |         |        
|                                   | Medical technology products from external customers: |                             |         |         |         |   |         |         |         |   |         |         |        
|                                   |                                                      | Medical imaging products    |         | $       | 174,962 |   |         | $       | 172,671 |   |         | $       | 138,499 |  
|                                   |                                                      | Camtronics                  |         |         | 38,092  |   |         |         | 51,352  |   |         |         | 40,043  |  
|                                   |                                                      | B-K Medical                 |         |         | 71,842  |   |         |         | 64,983  |   |         |         | 59,344  |  
|                                   |                                                      |                             |         |         |         |   |         |         |        
|                                   |                                                      |                             | 284,896 |         |         |   | 289,006 |         |         |   | 237,886 |        
|                                   | Security technology products from external customers |                             |         | 58,562  |         |   |         | 32,255  |         |   |         | 205,322 |        
|                                   | Corporate and other                                  |                             |         | 21,113  |         |   |         | 34,296  |         |   |         | 28,489  |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|                                   | Total                                                |                             | $       | 364,571 |         |   | $       | 355,557 |         |   | $       | 471,697 |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|Income (loss) before income taxes: |                                                      |                             |         |         |         |   |         |         |         |   |         |        
|                                   | Medical technology products:                         |                             |         |         |         |   |         |         |         |   |         |         |        
|                                   |                                                      | Medical imaging products(A) |         | $       | 27,697  |   |         | $       | (162    | ) |         | $       | (2,830  | )
|                                   |                                                      | Camtronics(B)               |         |         | (7,377  | ) |         |         | (1,343  | ) |         |         | (2,661  | )
|                                   |                                                      | B-K Medical                 |         |         | 5,645   |   |         |         | 3,838   |   |         |         | 4,576   |  
|                                   |                                                      |                             |         |         |         |   |         |         |        
|                                   |                                                      |                             | 25,965  |         |         |   | 2,333   |         |         |   | (915    | )      
|                                   | Security technology products                         |                             |         | 14,771  |         |   |         | 4,582   |         |   |         | 78,328  |        
|                                   | Corporate and other                                  |                             |         | 2,535   |         |   |         | 3,186   |         |   |         | 344     |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|                                   | Total                                                |                             | $       | 43,271  |         |   | $       | 10,101  |         |   | $       | 77,757  |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|Identifiable assets:               |                                                      |                             |         |         |         |   |         |         |         |   |         |        
|                                   | Medical technology products                          |                             | $       | 106,947 |         |   | $       | 88,644  |         |   | $       | 91,131  |        
|                                   | Camtronics                                           |                             |         | 40,908  |         |   |         | 53,334  |         |   |         | 57,158  |        
|                                   | B-K Medical                                          |                             |         | 71,143  |         |   |         | 66,282  |         |   |         | 58,611  |        
|                                   | Security technology products                         |                             |         | 15,497  |         |   |         | 14,364  |         |   |         | 16,941  |        
|                                   | Corporate and other(C)                               |                             |         | 262,210 |         |   |         | 229,447 |         |   |         | 233,576 |        
|                                   |                                                      |                             |         |         |         |   |         |         |        
|                                   | Total                                                |                             | $       | 496,705 |         |   | $       | 452,071 |         |   | $       | 457,417 |        
|                                   |                                                      |                             |         |         |         |   |         |         |        



|    |  |                                                                                                                                                            
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Includes a gain of $43,829 related to the Companys sale of
    its equity interest in Cedara, and an asset impairment charge of
    $3,000 in fiscal 2005.
|   
|(B) |  | Includes an asset impairment charge of $3,599 in fiscal 2005.                                                                                              
|   
|(C) |  | Includes cash equivalents and marketable securities of $195,321,
    $156,753, $167,763 in fiscal 2005, 2004 and 2003, respectively.                       

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ANALOGIC CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


(In thousands except share and per share data)




|       |      |  |  |                                 |               |   |         |             |  |   |       |  |  |         |        |  |       |   |        |       |  |   |        |  |  |   |         |  |  | 
|------ | ---- |  |  | ------------------------------- | ------------- | - | ------- | ----------- |  | - | ----- |  |  | ------- | ------ |  | ----- | - | ------ | ----- |  | - | ------ |  |  | - | ------- |  |  | 
|Fiscal |      |  |  |                                 |               |   |         |             |  |   |       |  |  |         |       
|Year   |      |  |  |                                 | United States |   |         | Netherlands |  |   | Japan |  |  | Germany |        |  | Other |   |        | Total | 
|       |      |  |  |                                 |               |   |         |             |  |   |       |  |  |         |        |  |       |   |        |       | 
|       | 2005 |  |  | Revenue from external customers |               | $ | 201,588 |             |  | $ | 5,653 |  |  | $       | 55,912 |  |       | $ | 33,421 |       |  | $ | 67,997 |  |  | $ | 364,571 | 
|       |      |  |  | Long-lived assets               |               |   | 60,535  |             |  |   |      |  |  |         |       |  |       |   |       |       |  |   | 27,019 |  |  |   | 87,554  | 
|       | 2004 |  |  | Revenue from external customers |               |   | 202,540 |             |  |   | 6,930 |  |  |         | 42,744 |  |       |   | 31,522 |       |  |   | 71,821 |  |  |   | 355,557 | 
|       |      |  |  | Long-lived assets               |               |   | 63,708  |             |  |   |      |  |  |         |       |  |       |   |       |       |  |   | 27,369 |  |  |   | 91,077  | 
|       | 2003 |  |  | Revenue from external customers |               |   | 340,109 |             |  |   | 7,099 |  |  |         | 34,608 |  |       |   | 24,601 |       |  |   | 65,280 |  |  |   | 471,697 | 
|       |      |  |  | Long-lived assets               |               |   | 57,069  |             |  |   |      |  |  |         |       |  |       |   |       |       |  |   | 26,857 |  |  |   | 83,926  | 







|    |                              
|--- | -----------------------------
|21. | Common stock repurchase plan:





|    |                   
|--- | ------------------
|22. | Subsequent events:









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ANALOGIC CORPORATION


SCHEDULE II  VALUATION AND QUALIFYING
ACCOUNTS


(In thousands)


|                                 |                          |            |   |            |            |  |           |            |     |  |            |   |  |            |   |           |        |  |  |   |  |  |   |       | 
|-------------------------------- | ------------------------ | ---------- | - | ---------- | ---------- |  | --------- | ---------- | --- |  | ---------- | - |  | ---------- | - | --------- | ------ |  |  | - |  |  | - | ----- | 
|                                 |                          |            |   | Charged to |            |  | Additions |            |     |  |            |   |  |           
|                                 |                          | Balance at |   |            | Profit and |  |           | Charged to |     |  | Deductions |   |  |            |   | Balance   |       
|                                 |                          | Beginning  |   |            | Loss or    |  |           | Other      |     |  | From       |   |  |            |   | at End of |       
|Description                      |                          | of Period  |   |            | Income     |  |           | Accounts   |     |  | Reserves   |   |  | Recoveries |   |           | Period | 
|                                 |                          |            |   |            |            |  |           |            |     |  |            |   |  |            |   |           |        | 
|Allowance for doubtful accounts: |                          |            |   |            |            |  |           |            |     |  |            |   |  |            |   |           |        |  |  |   |  |  |   |      
|                                 | Year ended July 31, 2005 |            | $ | 2,493      |            |  | $         | 432        |     |  |            |  |  |            | $ | (630      | )      |  |  |  |  |  | $ | 2,295 | 
|                                 | Year ended July 31, 2004 |            |   | 4,189      |            |  |           | 110        |     |  |            |  |  |            |   | (1,806    | )(A)   |  |  |  |  |  |   | 2,493 | 
|                                 | Year ended July 31, 2003 |            |   | 1,308      |            |  |           | 2,923      | (B) |  |            |  |  |            |   | (42       | )      |  |  |  |  |  |   | 4,189 | 



| |     |                                                                                                                                              
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------
| | (A) | Represents primarily $1,587 related to account receivable from
    SAHCO that was reserved in fiscal 2003 and written off in fiscal
    2004.



| |     |                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------
| | (B) | Represents primarily $1,587 related to accounts receivable from
    SAHCO, and $747 for an unsecured note from an unrelated party.

|                                                        |  |              |       |               |            |   |       |          |               |   |             |      |  |           |      |      |  |   |       | 
|------------------------------------------------------- |  | ------------ | ----- | ------------- | ---------- | - | ----- | -------- | ------------- | - | ----------- | ---- |  | --------- | ---- | ---- |  | - | ----- | 
|                                                        |  |              |       | Tax Valuation |            |   |       |          | Tax Valuation |   |             |     
|                                                        |  |              |       | Allowance     |            |   |       |          | Allowance     |   |             |     
|                                                        |  | Balance at   |       |               | Charged to |   |       | Charged  |               |   | Credited to |      |  | Balance   |     
|                                                        |  | Beginning of |       |               | Income Tax |   |       | to Other |               |   | Income Tax  |      |  | at End of |     
|Description                                             |  | Period       |       |               | Provision  |   |       | Accounts |               |   | Provision   |      |  | Period    |     
|                                                        |  |              |       |               |            |   |       |          |               |   |             |      |  |           |     
|Year ended July 31, 2005 income tax valuation allowance |  | $            | 3,287 |               |            | $ | 577   | (A)      |               |   |            |      |  |           |     |      |  | $ | 3,864 | 
|Year ended July 31, 2004 income tax valuation allowance |  |              | 4,406 |               |            |   | 172   |          |               | $ | (687        | )(C) |  | $         | (604 | )(B) |  |   | 3,287 | 
|Year ended July 31, 2003 income tax valuation allowance |  |              |      |               |            |   | 4,406 | (D)      |               |   |            |      |  |           |     |      |  |   | 4,406 | 



| |     |                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------
| | (A) | Represents the increase in valuation allowance resulting from
    additional losses in Canada and Belgium and losses in Singapore.



| |     |                                                                              
| | --- | -----------------------------------------------------------------------------
| | (B) | Represents the release of the valuation allowance at FTNI and in
    Germany.
|
| | (C) | Represents the release of a portion of the FTNI valuation
    allowance.     



| |     |                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------
| | (D) | Represents the establishment of a valuation allowance for losses
    in Canada, Belgium, and Germany.

74



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##### Table of Contents



INDEX TO EXHIBITS


| |       |       |  |                                                                                                                                           |  |                                                                                                                                                              
| | ----- | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | Title |  | Incorporated by Reference to                                                                                                             
| |       |       |  |                                                                                                                                          
| | 3.1   |       |  | Restated Articles of Organization as amended March 15, 1988                                                                               |  | Exhibit 3.1 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1988                                                          
| | 3.2   |       |  | By-laws, as amended January 27, 1988                                                                                                      |  | Exhibit 3.2 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1988                                                          
| | 10.1  |       |  | Land Disposition Agreement by and between City of Peabody
    Community Development Authority and Analogic Corporation                    |  | Exhibit to the Companys Annual Report on Form 10-K
    for the fiscal year ended July 31, 1981                                                              
| | 10.2  |       |  | a) Equity Infusion Agreement                                                                                                              |  | Exhibit 10.12(c) to the Companys Quarterly Report on
    Form 10-Q for the three months ended January 31, 1999                                              
| |       |       |  | (b) Resolution Agreement dated July 31, 1991 and ratified
    on August 8, 1991                                                           |  | Exhibit 10.12(d) to the Companys Annual Report on
    Form 10-K for fiscal year ended July 31, 1991                                                         
| | 10.3  |       |  | Restated Analogic Corporation Profit Sharing Plan dated
    July 31, 1985 and Amendment No. 1 thereto dated
    August 20, 1985           |  | Exhibit 10.9(c) to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1985                                                      
| | 10.4  |       |  | Employee Qualified Stock Purchase Plan dated June 10, 1986,
    as amended October 9, 1997 and October 15, 2002                           |  | Exhibit 10.1 to the Companys Post-Effective Amendment
    No. 2 to Registration Statement on Form S-8 filed
    July 24, 2003                               
| | 10.5  |       |  | Proposed 1988 Non-Qualified Stock Option Plan for Non-Employee
    Directors                                                              |  | Exhibit 10.20 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1988                                                        
| | 10.6  |       |  | Form of Indemnification Contract                                                                                                          |  | Exhibit 10.19 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1987                                                        
| | 10.7  |       |  | Agreement and Plan of Merger between SKY COMPUTERS, INC., and
    Analogic Corporation                                                    |  | Exhibit 10.22 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 1992                                                        
| | 10.8  |       |  | (a) Agreement between B-K Medical Holding A/S and Analogic
    Corporation dated October 20, 1992                                         |  | Exhibits to the Companys Report on Form 8-K dated
    December 18, 1992                                                                                     
| |       |       |  | (b) Addendum dated December 11, 1992 to Agreement between
    B-K Medical Holding A/S and Analogic Corporation dated
    October 20, 1992 |  |                                                                                                                                                              
| |       |       |  | (c) Shareholders Agreement between B-K Medical Holding A/S and
    Analogic Corporation dated December 11, 1992                           |  |                                                                                                                                                              
| | 10.9  |       |  | 1997 Non-Qualified Stock Option Plan for Non-Employee Directors
    dated January 31, 1997, as amended on December 8, 2003                |  | Appendix B to the Companys Definitive Proxy Statement
    dated December 15, 2003 for the Companys Annual
    Meeting of Stockholders held January 16, 2004
| | 10.10 |       |  | Key Employee Incentive Stock Option Plan dated June 11,
    1998 as amended October 12, 2000 and November 16, 2001                        |  | Exhibit A to the Companys Definitive Proxy Statement
    dated December 14, 2001 for the Companys Annual
    Meeting of Stockholders held January 18, 2002 



---



##### Table of Contents



| |       |       |  |                                                                                                                                                                   |  |                                                                                                                                                              
| | ----- | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       | Title |  | Incorporated by Reference to                                                                                                                                     
| |       |       |  |                                                                                                                                                                  
| | 10.11 |       |  | Key Employee Stock Bonus Plan dated October 12, 2000 as
    amended on March 11, 2003                                                                             |  | Appendix A to the Companys Definitive Proxy Statement
    dated December 15, 2003 for the Companys Annual
    Meeting of Stockholders held January 16, 2004
| | 10.12 |       |  | Summary of Compensation Policy for Directors of Analogic
    Corporation                                                                                          |  |                                                                                                                                                              
| | 10.13 |       |  | Form of Stock Option Grant for Non-Qualified Stock Option Plan
    for Non-Employee Directors dated January 31, 1997, as
    amended December 8, 2003             |  | Exhibit 10.29 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 2004                                                        
| | 10.14 |       |  | Form of Stock Options Grant for Key Employee Incentive Stock
    Option Plan dated June 11, 1998 as amended October 12,
    2000 and as amended November 16, 2001 |  | Exhibit 10.30 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 2004                                                        
| | 10.15 |       |  | Form of Restricted Stock Grant for Key Employee Stock Bonus Plan
    dated October 12, 2000, as amended on March 11, 2003                                         |  | Exhibit 10.31 to the Companys Annual Report on
    Form 10-K for the fiscal year ended July 31, 2004                                                        
| | 10.16 |       |  | Secondary sale of common shares of Cedara Software                                                                                                                |  | Exhibit 10.1 to the Companys Quarterly Report in
    Form 10-Q for the period ended April 30, 2005                                                          
| | 10.17 |       |  | Form of Indemnity Agreement                                                                                                                                       |  | Exhibit 10.1 to the Companys Report in Form 8-K
    dated June 17, 2005                                                                                     
| | 21    |       |  | List of Subsidiaries                                                                                                                                              |  |                                                                                                                                                              
| | 23    |       |  | Consent of PricewaterhouseCoopers LLP                                                                                                                             |  |                                                                                                                                                              
| | 31.1  |       |  | Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)/Rule 15d-15(a) of the Securities
    Exchange Act of 1934, as amended                     |  |                                                                                                                                                              
| | 31.2  |       |  | Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)/Rule 15d-15(a) of the Securities
    Exchange Act of 1934, as amended                     |  |                                                                                                                                                              
| | 32.1  |       |  | Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002         |  |                                                                                                                                                              
| | 32.2  |       |  | Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002         |  |