<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) Annual Report Pursuant to Section 13 or 15 (d) of
the Securities and Exchange Act of 1934
For the Fiscal Year Ended JUNE 30, 1995
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Commission file number 0-4090
ANALYSTS INTERNATIONAL CORPORATION
------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0905408
------------------------------- ---------------
(State or other jurisdiction of ( I.R.S. Employer
incorporation or organization) Identification No.)
7615 Metro Boulevard, Minneapolis, Minnesota 55439
-------------------------------------------- -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code: 612/835-5900
-------------
Securities registered pursuant to
Section 12 (b) of the Act: NONE
Securities registered pursuant to
Section 12 (g) of the Act:
Common Stock, par value $.10 per share
--------------------------------------
(Title of class)
Common Share Purchase Rights
----------------------------
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Yes X No
----- ------
The aggregate market value of the voting stock (Common Stock) held by non-
affiliates of the registrant as of August 31, 1995 was $204,918,781 based upon
the closing price as reported by Nasdaq.
As of August 31, 1995 there were 7,261,526 shares of the registrant's common
stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporated by reference are (i) portions of the annual report to shareholders
for the year ended June 30, 1995 (Parts I and II) and (ii) proxy statement dated
September 5, 1995 (Part III).
<PAGE>
PART I
ITEM 1. BUSINESS
Analysts International Corporation (the registrant) is engaged in the
software segment of the computer industry. Within this segment, the registrant
is engaged in the business of providing contract programming and related
software services through its branch and field offices to users and
manufacturers of computers. See "Software Services" and "Organization and
Marketing".
The registrant was incorporated under Minnesota law on March 29, 1966. Its
principal office is located at 7615 Metro Boulevard, Minneapolis, Minnesota
55439 and its telephone number is (612) 835-5900.
SOFTWARE SERVICES
Software services offered by the registrant include custom programming,
systems analysis and design, software-related consulting and specialized
software-related educational courses for computer programmers and analysts.
2
<PAGE>
Computers and computer equipment utilize software of two types: systems
software and applications software. Systems software, which includes operating
systems software and utility software, manages the input, flow, storage and
output of data and performs related housekeeping functions within the computer.
Applications software performs the specific tasks required by the computer user;
for example, programs which create invoices or which create records of accounts
receivables are applications programs.
The registrant's business primarily consists of providing services to
assist users of computer equipment in the development and maintenance of custom
applications software programs. It also provides services to maintain systems
software.
The registrant provides its services to a wide range of industries. Its
fiscal 1995 revenues were derived from services rendered to customers in the
following industry groups:
Approximate Percent
Industry Group FY 1995 Revenues
-------------- ----------------
Electronics 26.6%
Telecommunications 17.3%
Services 11.6%
Manufacturing 11.1%
Financial 6.7%
Oil and Chemical 5.9%
Merchandising 4.4%
Food 4.0%
Insurance/Health Care 3.9%
Power and Utility 2.1%
Transportation 2.0%
Government 1.5%
Other 2.9%
3
<PAGE>
The registrant provides a broad range of services to its customer base, and
during the year it was involved in a wide variety of projects. Examples of the
types of projects in which the registrant was involved in during the fiscal year
include: the development, implementation and support of custom software for an
on-line delivery system at Key Services Corporation; enhancing, modifying and
support of "legacy" software in the financial systems area of 3M; and design and
development of custom software in support of a traffic management system for
Maritz Performance Improvement Company. The registrant's projects continue to
involve nearly every type and manufacture of computers and all of the major
operating systems.
The registrant provided services to approximately 740 clients, of which
approximately 280 were new clients, and was engaged in approximately 3,835
different customer projects throughout the fiscal year. Consistent with its
practices in prior years, the registrant rendered these services on a time and
materials hourly rate basis. Invoices for services rendered are submitted no
less frequently than monthly, and payment is due net 30 days.
During the fiscal year, the registrant rendered services through twenty-two
(22) of its branch offices to various divisions of International Business
Machines Corporation, the aggregate revenues from which exceeded 10% of the
registrant's revenues for the fiscal year. A significant decline in revenues
from this customer could have an adverse impact on the registrant's revenues and
profits. As of July 29, 1995 the Company was named as one of four primary
vendors to IBM in three IBM regions and as one of four secondary vendors in
IBM's two other regions. Hourly rates for services provided to IBM under this
arrangement are very competitive, and as a result the profit margin from IBM
business is expected to be lower. The lower profit margin may be offset by a
higher volume of business. There can be no assurance, however, that the volume
of business done with IBM under the new arrangement will be sufficient to offset
the lower profit margin.
4
<PAGE>
No other customer accounted for more than 10% of the registrant's fiscal
1995 revenues.
In June, 1995 the Company entered into a three year agreement with US West
Inc. under which it will be the principal vendor to provide technical personnel
to US West's data processing operations. In addition to the approximately 150
programmers and other technical personnel it had on assignment at US West as of
the end of the fiscal year, the Company is also responsible for managing
subcontractors who provide approximately 600 workers.
5
<PAGE>
ORGANIZATION AND MARKETING
The registrant provides its software services on a nationwide basis through
its branch and field offices, assigned on a geographical basis to one of five
regions. Each branch office is staffed with technical personnel and is managed
by a branch manager, who has primary responsibility for the administration,
personnel and recruiting, customer relations and profitability of the branch.
The branch manager has broad authority to conduct the operation of the branch,
subject to adherence to corporate policies. In general, field offices are
established to support specific projects for one or more specific customers at
locations not served by a local branch office and are managed by a branch within
the same geographical region. A field office may become a branch office when
the volume of business and the prospects for additional business justify the
additional location expenses associated with branch office status.
During the fiscal year, the registrant maintained branch offices in the
following cities: Atlanta, Austin, Boca Raton, Chicago, Cleveland, Columbus
(Ohio), Dallas, Denver, Detroit, Houston, Indianapolis, Kansas City, Lexington
(Kentucky), Iselin (New Jersey), Minneapolis, New York City, Omaha, Phoenix,
Raleigh/Durham, Rochester (Minnesota), Rochester (New York), St. Louis, San
Francisco, Seattle and Tampa. On July 1, 1995, additional branch offices were
established in Cincinnati and Tulsa.
6
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The registrant utilizes its own direct sales force to sell its services.
At the end of the fiscal year, the registrant's sales staff totalled 82 in
number. The ability to recruit and hire experienced technical personnel with
backgrounds and experience suitable for customer requirements is an important
factor in the registrant's business, and, therefore, the registrant utilizes a
recruiting staff to assist with this function, and each branch office employs at
least one full time recruiter. At the end of the fiscal year, the registrant's
recruiting staff totalled 78 in number.
COMPETITION
The registrant competes with software consulting divisions of several large
companies (including DEC, Andersen Consulting and IBM) on a national basis.
These organizations and their software consulting divisions are substantially
larger than the registrant in terms of sales volume and personnel and have
substantially greater financial resources.
The registrant also competes with other national software services
companies such as Computer Task Group and Keane Inc., which are larger than
the registrant, and several other national software services companies
(including Computer Horizons and Computer Data Systems, Inc.) which are
approximately the same size as the registrant.
The registrant's branches compete in their local market areas with numerous
locally based software services firms. Most of the locally based competitors
are approximately the same size as or smaller than the registrant's local
branch, although in certain market areas they are larger than the registrant's
local branch.
7
<PAGE>
The registrant believes its total staff and sales volume are larger than
most of the national and local software services companies, but in some market
areas certain of these competitors may be larger. Although there are no
comprehensive industry statistics available, the registrant believes it is among
the ten largest national software services companies in the United States.
Principal competitive factors in the software services business include
technical expertise, responsiveness to customers' needs, reputation and
credibility, and hourly rates. The registrant believes it is competitive in
these respects, although some of its competitors may charge lower hourly rates.
PERSONNEL
The registrant has approximately 3,170 personnel. Of these, approximately
2,700 are systems analysts, computer programmers and other technical personnel
whose services are billable to clients. Several years of programming experience
is generally a prerequisite to employment with the registrant.
Maintaining the present volume of the registrant's business and its
continued growth depend to a significant extent on the registrant's ability to
attract and retain qualified technical personnel. Such personnel are in great
demand. Although the registrant has been able to attract and retain qualified
technical personnel and believes its personnel relations are satisfactory, there
can be no assurance the registrant will be able to continue to attract and
retain such personnel. Its inability to do so would have a material adverse
effect on the registrant's business.
8
<PAGE>
OTHER MATTERS
Raw materials, seasonality, compliance with environmental protection laws,
and patents, trademarks, licenses, franchises or other concessions are not
material to an understanding of the registrant's business. No portion of the
registrant's business is subject to renegotiation of profits at the election of
the government. Backlog is not material because nearly all of the registrant's
contracts for services, including contracts with the government (which are not
material), are terminable by either the customer or the registrant on notice of
30 days or less.
ITEM 2. PROPERTIES
The principal executive office of the registrant is located at 7615 Metro
Boulevard, Minneapolis, Minnesota 55439, in a 15,000 square foot office building
which is owned by the registrant. All branch offices and field offices are held
under leases with varying expiration dates ranging from 30 days to 8 years. See
Note G of Notes to Consolidated Financial Statements at page 21 of the
registrant's 1995 Annual Report to Shareholders.
9
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the registrant is a party
to or which any of its property is subject, other than ordinary routine
litigation incidental to the business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the registrant's shareholders during
the fourth quarter of the registrant's 1995 fiscal year.
10
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Name Age Title
- ---- --- -----
<S> <C> <C>
Frederick W. Lang 71 Chairman and Chief Executive
Officer since 1989; President
and Chief Executive Officer
from 1966-1989; Treasurer from
1987-1989.
Victor C. Benda 64 President and Chief Operating
Officer since 1989, Executive
Vice President from 1983 to
1989, Senior Vice President
from 1980 to 1983, Vice
President from 1967 to 1980.
Thomas R. Mahler 49 Secretary since 1979; General
Counsel since 1982.
Gerald M. McGrath 56 Treasurer since 1989; Vice
President, Finance since 1988;
Assistant Treasurer from 1976
to 1989; Controller from 1966
to 1989.
</TABLE>
Terms of office expire October 17, 1995.
11
<PAGE>
PART II
The following portions of the registrant's annual report to shareholders
for the fiscal year ended June 30, 1995 are incorporated by reference in
response to Items 5, 6, 7 and 8 as follows:
<TABLE>
<CAPTION>
Items in Form 10-K Caption or Section and Page in Annual Report
- ------------------ ------------------------------------------------
<S> <C> <C>
5 Market Price Ranges on Common Stock 23
6 Five Year Summary 22
7 Management's Discussion and Analysis 14-15
8 Financial Highlights and Statements Inside Front
Cover, 16-23
</TABLE>
(See Index to Consolidated Financial Statements and Schedules set forth in Item
14 of this Form 10-K.)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There have been no disagreements with or changes in the registrant's
independent auditors within the past 24 months.
12
<PAGE>
PART III
The information regarding executive officers required by Item 10 is set
forth under the caption "Executive Officers of the Registrant" in Part I of this
Form 10-K. Other information called for in Part III, including information
regarding directors (Item 10), executive compensation (Item 11) and security
ownership of certain beneficial owners and management (Item 12), is set forth
in the registrant's definitive proxy statement for the annual meeting of
shareholders to be held October 17, 1995, filed pursuant to Regulation 14A, as
follows:
<TABLE>
<CAPTION>
Items in Form 10-K Caption and Page in Definitive Proxy Statement
------------------ ----------------------------------------------
<S> <C> <C>
10 Election of Directors 2-3
11 Board Committees and Compensation and
Executive Compensation 3, 6-9
12 Election of Directors and Principal
Shareholders 2-3, 11
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1995:
a. No director, executive officer, nominee for election as a director, holder
of more than five percent of the registrant's common stock or members of
the immediate family of any of the foregoing persons had any direct or
indirect material interest in any transaction or series of transactions
to which the registrant was a party and in which the amount exceeded
$60,000, nor is any such transaction proposed;
13
<PAGE>
b. The registrant was not a party with any entity in which any of the
registrant's directors or nominees for election as directors was an
executive officer, held more than a 10% equity interest, was a member
of or of counsel to (in the case of a law firm) or was a partner or
executive officer (in the case of an investment banking firm), in any
transaction involving payments of more than five percent of the gross
revenues of either the registrant or such entity, nor is any such
transaction proposed; and
c. No director, executive officer or nominee for election as a director or (i)
any member of the immediate family of any of the foregoing, (ii) any
corporation or beneficial holder of ten percent or more of any class of
equity securities, or (iii) any trust or other estate in which such
person served as a trustee or in a similar capacity was indebted to the
registrant in excess of $60,000.
Subparagraph d. of this Item is not applicable.
14
<PAGE>
PART IV
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
a.1 CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of Analysts International Corporation
and its subsidiary and the related independent auditors' report are
included on the following pages of its annual report to shareholders for
the fiscal year ended June 30, 1995:
Pages in Annual Report
----------------------
Consolidated Balance Sheets at June 30, 1995 and 1994 16
Consolidated Statements of Income for each of the
three years in the period ended June 30, 1995 17
Consolidated Statements of Cash Flows for each of the
three years in the period ended June 30, 1995 18
Consolidated Statements of Shareholders' Equity for
each of the three years in the period ended
June 30, 1995 19
Notes to Consolidated Financial Statements 20-21
Independent Auditors' Report 22
a.2 CONSOLIDATED FINANCIAL STATEMENT SCHEDULES Page Herein
-----------
Independent Auditors' Report 17
Schedule VIII. Valuation and Qualifying Accounts 18
Other consolidated financial statement schedules are omitted because they
are not required or the information is presented in the consolidated financial
statements or notes thereto.
15
<PAGE>
a.3 EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Exhibit Page
- -------------- ------------
<C> <S>
3-a Articles of Incorporation, as amended (Exhibit 3-a to Annual
Report on Form 10-K for fiscal year 1988, Commission File No. 0-4090,
incorporated by reference).
3-b Restated Bylaws (Exhibit 3-b to Annual Report on Form 10-K for fiscal
year 1988, Commission File No. 0-4090, incorporated by reference).
4-a Specimen Common Stock Certificate (Exhibit 4(a) to Annual Report on
Form 10-K for fiscal year 1989, Commission File No. 0-4090,
incorporated by reference).
4-b Rights Agreement dated as of June 16, 1989 between Analysts
International Corporation and Norwest Bank Minnesota, N.A., as Rights
Agent which includes the form of Rights Certificate and Summary of
Rights (Exhibit A to the Registrant's Form 8-A dated June 16, 1989,
Commission File No. 0-4090, incorporated by reference).
4-c First Amendment to Rights Agreement dated as of May 8, 1990 between
Analysts International Corporation and Norwest Bank Minnesota, N.A. as
Rights Agent (Exhibit 4(c) to Annual Report on Form 10-K for fiscal
year 1991, Commission File No. 0-4090, incorporated by reference).
10-a 1981 Stock Option Plan (Exhibit A to Definitive Proxy Statement dated
September 22, 1989 for registrant's 1989 Annual Meeting of
Shareholders, Commission File No. 0-4090, incorporated by reference).
10-b Senior Executive Retirement Plan (Exhibit 10-e to Annual Report on
Form 10-K for fiscal year 1984, Commission File No. 0-4090,
incorporated by reference).
10-c Deferred Compensation Plan (Exhibit 10-g to Annual Report on Form 10-K
for fiscal year 1984, Commission File No. 0-4090, incorporated by
reference).
16
<PAGE>
a.3 EXHIBITS (con't)
Exhibit Number Exhibit Page
- -------------- ------------
10-d 1985 Incentive Stock Option Plan (Exhibit 10(d) to Annual
Report on Form 10-K for fiscal year 1991, Commission File
No. 0-4090, incorporated by reference).
10-e 1994 Stock Option Plan (Exhibit A to Definitive Proxy Statement
dated September 6, 1994 for registrant's 1994 Annual Meeting of
Shareholders, Commission File No. 0-4090, incorporated by
reference).
11 Calculations of Earnings Per Share.
13 1995 Annual Report to Shareholders.
22 Subsidiaries of Registrant
24 Independent Auditors' Consent.
25 Powers of Attorney.
b. REPORTS ON FORM 8-K
There were no reports on Form 8-K for the three months ended June 30, 1995.
</TABLE>
17
<PAGE>
INDEPENDENT AUDITORS' REPORT ON SCHEDULE
Shareholders and Board of Directors
Analysts International Corporation
Minneapolis, Minnesota
We have audited the consolidated financial statements of Analysts International
Corporation and its subsidiary as of June 30, 1995 and 1994, and for each of the
three years in the period ended June 30, 1995, and have issued our report
thereon dated August 14, 1995; such financial statements and report are included
in your 1995 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the consolidated financial statement
schedule of Analysts International Corporation and subsidiary, listed in Item 14
a.2. This financial statement schedule is the responsibility of the
Corporation's management. Our responsibility is to express an opinion based on
our audits. In our opinion, this financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
August 14, 1995
18
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance
beginning cost and net of at end
of period expenses recoveries of period
---------- ---------- ---------- ---------
Description
<S> <C> <C> <C> <C>
Allowance for doubtful accounts:
Year ended June 30, 1995 $ 600,000 $171,000 $221,000 $550,000
Year ended June 30, 1994 450,000 262,000 112,000 600,000
Year ended June 30, 1993 400,000 173,000 123,000 450,000
</TABLE>
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ANALYSTS INTERNATIONAL CORPORATION
BY /s/ F.W. Lang
-----------------------------
DATE September 28, 1995 F. W. Lang, Chairman
------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
---------
<S> <C> <C>
/s/ F. W. Lang Chairman & Chief Executive Officer
- ------------------------ (Principal Executive Officer)
F. W. Lang
/s/ G. M. McGrath Vice President, Finance and Treasurer
- ------------------------ (Principal Finance and
G. M. McGrath Accounting Officer)
/s/ V. C. Benda* President and Chief Operating Officer
-----------------------
V. C. Benda September
28, 1995
/s/ W. K. Drake* Director
- -------------------------
W. K. Drake
/s/ M. A. Loftus* Director
- -------------------------
M. A. Loftus
/s/ E. M. Mahoney Director
- ------------------------
E. M. Mahoney
/s/ R. L. Prince Director
- ------------------------
R. L. Prince
<FN>
*F.W. Lang, by signing his name hereto, hereby signs this form 10-K on behalf of
the persons indicated pursuant to powers of attorney filed herewith.
</TABLE>
/s/ F. W. Lang
-------------------------------
F. W. Lang, Chairman
20
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Page No.*
- -------------- ---------
<S> <C> <C>
11 Calculations of Earnings Per Share.
13 1995 Annual Report to Shareholders.
22 Subsidiaries of Registrant.
24 Independent Auditors' Consent.
25 Powers of Attorney.
27 Financial Data Schedule
<FN>
- ---------------------------------------------
*Reference is to the page number in the sequential numbering system.
For a list of exhibits incorporated by reference and not filed with this Form
10-K, see Item 14 a.3 at pages 15-16 of this Form 10-K.
</TABLE>
21
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EXHIBIT 11
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 11
(Page 1 of 2)
CALCULATION OF PRIMARY EARNINGS PER SHARE
<TABLE>
<CAPTION>
Year Ended June 30
----------------------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Net earnings $ 8,266,000 $ 7,951,000 $11,256,000
--------- --------- ----------
--------- --------- ----------
Weighted average number of
common shares outstanding 7,038,000 7,097,000 7,193,000
Dilutive effect of stock
options outstanding after
application of treasury
stock method 132,000 115,000 81,000
--------- --------- ------
7,170,000 7,212,000 7,274,000
--------- --------- ----------
--------- --------- ----------
Net earnings per common
and common equivalent
share, based upon weighted
average number of shares
outstanding $1.15 $1.10 $1.55
---- ---- ----
---- ---- ----
</TABLE>
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 11
(Page 2 of 2)
CALCULATION OF FULLY DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
Year Ended June 30
----------------------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Net earnings $ 8,266,000 $ 7,951,000 $11,256,000
--------- --------- ----------
--------- --------- ----------
Weighted average number of
common shares outstanding 7,038,000 7,097,000 7,193,000
Dilutive effect of stock
options outstanding after
application of treasury
stock method 132,000 122,000 97,000
--------- --------- ------
7,170,000 7,219,000 7,290,000
--------- --------- ----------
--------- --------- ----------
Net earnings per common
and common equivalent
share, based upon weighted
average number of shares
outstanding $1.15 $1.10 $1.54
---- ---- ----
---- ---- ----
</TABLE>
No significant variation in primary versus fully diluted earnings per share
existed for the years 1993-1995.
<PAGE>
EXHIBIT 13
ANNUAL REPORT
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
The Company offers a variety of computer software services to a wide range of
industries, including consulting, project management, systems analysis and
design, programming, software maintenance and training.
About the cover:
The emblem pictured on the cover is awarded in the form of a medallion to AiC
employees to recognize outstanding performance. The words - "Excellence,
Integrity, Innovation" - are the principles that have guided the Company since
its founding.
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Year Ended June 30 % Increase
1995 1994 (Decrease)
--------- --------- ----------
<S> <C> <C> <C>
Revenues $ 218,426 $ 175,982 24.1
Income before income taxes 18,530 12,775 45.0
Net income 11,256 7,951 41.6
Per share of common stock:
Net income $ 1.55 $ 1.10 40.9
Shareholders' equity 6.22 5.14 21.0
Dividends declared .52 .48 8.3
Average common and common equivalent
shares outstanding 7,274,000 7,212,000 .9
Number of personnel 3,170 2,600 21.9
Return on equity 27.6% 23.3% 18.5
Current ratio 3.33 4.20 (20.7)
Working capital $ 39,767 $ 31,473 26.4
Long-term debt $ 0 $ 0 --
</TABLE>
<PAGE>
[PHOTO]
FREDERICK W. LANG AND VICTOR C. BENDA
TO OUR SHAREHOLDERS:
Fiscal 1995 was the best year ever for Analysts International Corporation.
Revenue and net income both reached record high levels. We also reached two
significant milestones -- revenues surpassed $200 million and our staff
increased to more than 3,000.
RECORD REVENUES AND EARNINGS
Revenues were $218,426,000 for the year, up 24.1 percent from last year's
$175,982,000.
Net income reached $11,256,000, equal to $1.55 per share. This was an
increase of 40.9 percent from 1994, when we earned $7,951,000, or $1.10 per
share. After-tax margins improved to 5.2 percent from 4.5 percent in 1994.
DIVIDEND INCREASE
Regular quarterly dividends were declared during 1995 at the rate of 13 cents
per share, an increase of 8.3 percent over the dividend rate in the previous
year.
At their meeting in August 1995, the directors again increased the
dividend. The new quarterly rate is 15 cents per share, a 15.4 percent increase.
1
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AiC is one of the few companies that has been able to grow entirely
through internal expansion and finance its growth with internally generated
funds while maintaining substantial dividends. We are able to do this because
of our strong balance sheet, which continues to be free of any long-term debt.
STAFF EXCEEDS 3,000 IN 27 BRANCHES
Our staff expanded in line with the revenue increase to a total of 3,170 at year
end. We added 570 people, most of them billable technical personnel, during the
year.
The number of branch offices grew to 27 with the addition of Cincinnati and
Tulsa. Branch offices include a sales and recruiting staff in addition to the
technical people who support and manage projects for our clients.
We also maintain a number of field offices, strategically located to meet
the needs of specific customer projects.
INDUSTRY GROWTH CONTINUES
The professional services segment of the software industry continues to expand,
with growth of 14 percent annually projected for the next five years. AiC has
traditionally grown faster than the industry and our annual growth target
continues to be 20 percent.
2
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[PHOTO]
TRANSQUEST PROVIDES COMPUTING AND COMMUNICATIONS SERVICES FOR DELTA AIR LINES
AND OTHER CUSTOMERS IN THE TRAVEL AND TRANSPORTATION INDUSTRIES.
[PHOTO]
DAVID JENKINS, AIC STAFF MANAGER (STANDING) WITH TRANSQUEST'S BILL ELDER AND
PATTY WALTER.
TRANSQUEST
AN AT&T AND DELTA AIR LINES JOINT VENTURE
ATLANTA, GEORGIA
In 1994 Delta Air Lines and AT&T Global Information Solutions created a joint
venture called TransQuest. Its mission: To be the world's best provider of
information systems and services to the travel and transportation industries.
Based in Atlanta, TransQuest employs approximately 1,200 people and expects
to sell nearly $3 billion in technology products and services to Delta alone
over the next decade. Beyond that, the company is marketing computing and
communications solutions to other companies in the travel and transportation
industries, drawing on Delta's industry experience and AT&T's communications and
computing capabilities.
"AiC is one of a very select few approved vendors for procurement of
consulting, programming and technical staff," said Gary Phanco, of TransQuest's
contract resources management office. "They have a very strong, very ethical
branch management here in Atlanta -- very responsive to our requirements. They
have been highly effective in providing complementary expertise -- specialists
in project management, business analysis, network integration, information
architecture and mainframe and client/server architecture systems building.
They have done a tremendous job of screening talent for us, so we don't have to
invest our time in that."
Transquest is described by Delta and AT&T as a strategic initiative
designed to enhance Delta's competitiveness by providing immediate access to
world class, state-of-the-art technology, while at the same time creating a
potential new source of long-term revenues.
"The bottom line is, we're in an extremely competitive marketplace -- one
that requires improvements in productivity," Phanco said. "AiC provides a way
to complement the resources we have on staff during a specific period of need,
helping to drive operating costs down."
3
<PAGE>
Among trends supporting this growth is the increase in outsourcing of
programming needs. Corporate staffs are shrinking, generally, and companies are
contracting out activities which are peripheral to their principal business. In
a growing number of companies, AiC has assumed responsibility for maintenance
and modification of existing legacy systems, freeing the corporate staff to
focus on core competencies. We also are an efficient source of the specialized
expertise that is difficult to maintain on a corporate staff.
There also continues to be a backlog of software needs at most companies.
Management's needs for sophisticated computer applications are simply growing
faster than they can be met by corporate staffs.
AIC EXPANDS OUTSOURCING
We recently signed a major outsourcing contract with U S West Inc., under which
AiC is the principal vendor supplying leased technical personnel to U S West's
data processing operations. We have formed a new division, AiC TechWest, with
headquarters in Denver, to manage the U S West business.
At present levels of support, the three-year contract will add
approximately $50 million to our annual revenues. AiC currently has about 175
people working in various locations on projects for U S West. Under terms of
the contract, AiC also manages a number of
4
<PAGE>
[PHOTO]
THE OMAHA HOUSING AUTHORITY HAS CREATED A CONSTRUCTION TRAINING PROGRAM FOR
RESIDENTS IN WHICH THEY WORK SIDE-BY-SIDE WITH OHA JOURNEYMEN TO LEARN
CARPENTRY, ELECTRICAL AND PLUMBING SKILLS.
[PHOTO]
DEAN LOCKETT OF AIC (CENTER) WITH LAURIE PIEPER, OHA'S DIRECTOR OF HUMAN
RESOURCES, AND ROBERT ARMSTRONG, OHA PRESIDENT.
OMAHA HOUSING AUTHORITY
OMAHA, NEBRASKA
Laurie Pieper, Human Resources Director for the Omaha Housing Authority, got an
emergency call at home on a Saturday afternoon last March: The OHA's entire
three-person computer management and programming staff, which was in the midst
of a difficult conversion from a Wang environment to AS/400, RPG language, had
given up and walked off the job.
Pieper knew that a serious disruption in the flow of data processing could
be crippling to the administration of OHA, which operates nearly 7,000 housing
units in multiple Omaha neighborhoods. The OHA and its president, Robert
Armstrong, have been widely recognized as role models for the public housing
industry and honored for innovative programs to help public housing residents
become economically and socially independent. The OHA philosophy: "We do not
want the public housing children of today to have a need for public housing when
they are adults."
After listening to a farewell voice-mail message from the departing
computer crew, Pieper acted swiftly.
"I immediately telephoned AiC, and someone was in the office -- on a
Saturday afternoon!" she recalled. "I said, 'Help! Here's my situation. We've
got 260 fulltime employees, but no computer manager or programmers except the
three people who just quit. I need the best you've got!'"
AiC went to work on the problem immediately, providing a consultant who was
able to take over day-to-day direction of the department and the conversion
process the following week. One of his first challenges: a programming problem
that was threatening to block issuance of more than a thousand checks to private
landlords who provide rental assistance housing units through OHA. The AiC
staff worked up a program overnight that successfully generated the checks -- on
time.
Pieper was familiar with AiC, because the OHA had already begun to look to
it for programming help in the Wang-AS/400 conversion.
"I had met with AiC representatives and was favorably impressed with their
ability to pull in what was needed and to communicate with non-technical
people," Pieper said. "We are still pleasantly impressed with AiC."
5
<PAGE>
subcontractors who currently supply about 600 workers. We expect the long-term
effect to be very positive for AiC, although margins will be reduced.
The new agreement significantly expands the scope of our services to U S
West, one of our long-time customers, and makes AiC a major participant in the
growing outsourcing market.
QUALITY EMPHASIS CONTINUES
We continued to refine and evolve our Total Quality Management program in 1995.
This four-year-old initiative formalized the emphasis on excellence and quality
that has been a hallmark of our operations since the company's inception 29
years ago.
Our TQM approach has three primary components:
- A strong focus on our customers' needs and expectations, and their
opinion of AiC as a vendor.
- Periodic self-assessments at all levels of the company.
- On-going processes to correct flaws identified by the program.
6
<PAGE>
[PHOTO]
THE 3M VIDEODISC IS ONE OF APPROXIMATELY 60,000 PRODUCTS MANUFACTURED AND
MARKETED BY 3M THROUGH MORE THAN 50 DIVISIONS AND FOREIGN SUBSIDIARIES.
[PHOTO]
(FROM LEFT) MIKE LEGUT, 3M; MAUREEN MURPHY AND KEVIN TIBERG, AIC CONSULTANTS;
PETER ATKINS, 3M.
3M
ST. PAUL, MINNESOTA
Innovation is as closely associated with 3M Company as Scotch Tape or Post-it
Notes. The company consistently ranks in the Top Ten on Fortune magazine's
annual list of "America's Most Admired Companies," receiving especially high
marks for the fresh new product ideas that flow from its multiple business
sectors year after year. Its emphasis on innovation has produced a
multinational organization with annual sales of $15 billion from some 60,000
products manufactured and marketed by more than 50 divisions and foreign
subsidiaries serving all principal overseas markets in 57 countries. First-year
sales of new products totaled $1 billion in 1994, a year in which 3M generated
543 patents, a record for the company.
3M's relationship with AiC illustrates how 3M works to promote innovation
through an environment of continuing opportunity for professional growth and
challenge for 3M's employees.
A Preferred Vendor to 3M since 1988, AiC was 3M's choice to undertake a
pilot program of outsourcing the maintenance of "legacy" software -- software
that was written for use on earlier generations of computer technology but that
continues to perform important functions at acceptable performance levels.
Maintenance of legacy software can be difficult for companies such as 3M because
the technical skills needed can be hard to find and because programmers often
prefer new development projects involving new technology rather than maintaining
existing programs operating in dated technical environments. One of the
important benefits of outsourcing application maintenance is to free valuable
employees for more strategic projects.
AiC's assignment, beginning in early 1994, was to take over support of a
critical portfolio of legacy software used in the 3M financial systems area.
AiC's project team of seven consultants, under the direction of the AiC project
manager, is responsible for resolving production problems, enhancing and
modifying the software to meet changing user needs and keeping the software in
sync with changes to the hardware and operating system environment.
"What we've been able to do is put more of our 3M people into new
applications development," said Peter Atkins, Director, IT Financial Systems.
"We have more satisfied 3M people moving into areas with more challenges and
more opportunity."
The AiC team began working with their 3M counterparts in February 1994. "By
June they were pretty much independent, and our people went into their new
assignments," Atkins said.
Since then the AiC team has been managing the systems in their entirety --
monitoring, maintaining and enhancing them, answering client questions and
providing other client support -- and adding more systems to its portfolio of
responsibilities.
"I've been very pleased with AiC's ability to complete work requests to
respond quickly and to communicate effectively" Atkins said. "The feeling is
they care."
7
<PAGE>
The aim of the program is Total Customer Satisfaction. To achieve this, we
must know what every client expects and plan our work to meet and then exceed
their expectations. We measure the level of customer satisfaction through
frequent interaction with them and, more formally, through a comprehensive
annual survey.
Repeat business continues to support our growth. To that end, we believe
providing quality customer service and achieving our strategic business goals
are complementary and inseparable. In 1995, 85 percent of our business came from
clients with whom we had previously done business. These relationships tend to
be very long term; we have worked an average of 14 years for our 20 largest
clients.
ENGAGEMENTS SHOW DIVERSITY, INCREASING RESPONSIBILITY
During 1995, AiC provided services to a total of 740 clients involving 3,835
different projects. The diversity of these assignments is evident in the case
histories featured in this year's report.
Increasingly, AiC is assuming project management responsibility, under
which the client provides us with their objectives and
8
<PAGE>
[PHOTO]
MARITZ INC. DELIVERS A WIDE RANGE OF CUSTOM-DESIGNED PERFORMANCE IMPROVEMENT
SERVICES FROM ITS SUBURBAN ST. LOUIS CAMPUS.
[PHOTO]
(FROM LEFT) DAN GABRIEL, AIC; ROBERT L. JOHNSON, MARITZ CORPORATE VICE PRESIDENT
AND DIRECTOR, DATABASE MARKETING DIVISION; STEPHEN RUBIN, AIC; CONNIE CONROY,
TRAFFIC DIRECTOR FOR MARITZ DIRECT MAIL SERVICES.
MARITZ PERFORMANCE IMPROVEMENT COMPANY
ST. LOUIS, MISSOURI
Maritz Performance Improvement Company is one of the primary operating units of
Maritz Inc., the largest provider of integrated performance improvement services
in the world. Maritz Inc. generated $1.66 billion in annual revenues
internationally in its most recent fiscal year through marketing services,
employee involvement programs and travel services.
The fastest-growing segment of Maritz Performance Improvement is the
Database Marketing Division, which was established three years ago to help
client companies expand their marketing efforts into direct mail, telemarketing
and customer database research. By 1994, Database Marketing found itself
handling a dramatic surge of extensive and aggressive direct mail campaigns by
both new and existing clients. These client-driven efforts often involve multi-
piece printed packages sent to millions of homes and businesses across the
country. A single major client required mailing more than 90 million pieces in
1994 -- with all printed materials coming from Maritz headquarters in suburban
St. Louis, Missouri.
A major challenge for Maritz was tracking the multi-layered deadlines
needed to produce this high volume of print production. Maritz approached AiC
in search of the expertise and experience needed to handle the software
requirements of this intricate and expanding scheduling problem. AiC worked
with Maritz representatives to study the scope of the project, to identify and
set priorities in the development of the solution, and -- finally -- to develop
the custom software needed to support Maritz's custom Traffic Management
System.
When the project was completed, AiC had developed custom software that
produces management reports on a department-wide scale down to individual
employee reports that specify daily deadlines on every printed piece produced by
the Direct Mail Services Department.
AiC representatives have continued their working relationship with Maritz.
AiC is helping Maritz to redevelop a key business system that Maritz uses to aid
its clients in improving performance in such areas as sales, marketing, quality,
customer satisfaction and cost reduction.
9
<PAGE>
we manage the software development project against those objectives. In these
situations, we provide the methodology, the technical people who execute the
assignment and the management personnel who supervise them.
POSITIVE OUTLOOK FOR 1996
The economy remains strong, and we believe we are positioned well to make
further gains in 1996. We look forward to reporting to you on our continued
progress.
Sincerely,
/s/ Frederick W. Lang /s/ Victor C. Benda
Frederick W. Lang Victor C. Benda
CHAIRMAN AND PRESIDENT AND CHIEF
CHIEF EXECUTIVE OFFICER OPERATING OFFICER
AUGUST 17, 1995
10
<PAGE>
[PHOTO]
KEY SERVICES' ON-LINE DELIVERY SYSTEM PROVIDES REAL-TIME DELIVERY OF INFORMATION
TO BRANCHES, TO ATMS AND DIRECTLY TO CUSTOMERS OF THE KEY FAMILY OF BANKS.
[PHOTO]
JOANN MCKISSACK, AIC SENIOR CONSULTANT, WITH WERNER SONNTAG, KEY SERVICES
PROJECT MANGER.
KEY SERVICES CORPORATION
A SUBSIDIARY OF KEYCORP
CLEVELAND, OHIO
Key Services Corporation provides MIS services to KeyCorp, one of the nation's
largest multibank holding companies, with assets of $67 billion and more than
1,300 branch and affiliate offices in 25 states from Maine to Alaska.
The Key family of banks includes the Great Lakes Region's Society National
Bank -- a regional banking power headquartered in Cleveland along with Key
Services Corporation and the parent company. AiC has a long-standing
relationship with Society National and has worked closely with Key Services to
support KeyCorp's objective of maintaining a leadership role in the financial
services industry by providing customers with innovative products, services and
delivery methods.
For example, the Teller and ATM Systems Department of Key Services
Corporation provides real-time delivery of information to branches, ATMs, all
customer-service representatives and directly to customers through Voice
Response Units. AiC has played an important role in the development,
implementation and support of the on-line delivery system (OLDS), a CICS/DB2
host-based system, to provide this information directly to customers and to
other computer systems.
"A priority for the Teller/ATM Systems Department is the delivery of high-
quality products and services," said Key Service's Maureen McCutcheon, Vice
President and Department Manager. "Our partnership with Analysts International
Corporation has been very beneficial to achieving these goals. Meeting or
exceeding our companies' expectations has been a common goal for AiC and Key
Services."
AiC has been involved in the development of OLDS from the beginning,
participating in planning sessions, analysis, programming, implementation and
on-going development and support of the system. Key Services is currently
expanding the OLDS system beyond Society National Bank and the Great Lakes
Region to the rest of the Key family of banks, with continuing support from AiC.
11
<PAGE>
[PHOTO]
ILLINOIS STUDENT ASSISTANCE COMMISSION
DEERFIELD, ILLINOIS
ISAC PROVIDES STUDENTS WITH DETAILED GUIDANCE TO THE MANY FINANCIAL ASSISTANCE
PROGRAMS IT ADMINISTERS -- PLUS ACCESS TO A DATABASE CONTAINING UPDATED
INFORMATION ON MORE THAN 200,000 AVAILABLE FEDERAL, STATE AND PRIVATE AID
SOURCES.
[PHOTO]
(FROM LEFT) MARK HOLYSZ, MARK BARUCH AND KATHY SHIRAGA OF ISAC; PETE BLACKWELL,
AIC SENIOR CONSULTANT; DICK LANE, AIC PROJECT MANAGER.
The Illinois Student Assistance Commission, or ISAC, is the agency
responsible for administering student financial assistance programs such as
scholarship, grant and loan programs in Illinois -- nearly $650 million worth in
1994. Phone calls from students, parents, high school counselors, college and
university financial aid administrators and lenders flow in to the agency at the
rate of more than one a minute. Loans guaranteed by ISAC are disbursed at a
rate of more than 3,300 a week.
"We are a massive data collector, the handler and manipulator of critical
information on behalf of a wide variety of partners necessary to make higher
education work from a financial aid standpoint," said Sheila Bourque, Director
of MIS. Each piece of that data is a piece of someone's hopes and dreams, she
notes. So it must be handled with great care and precision as well as speed and
efficiency.
AiC has been a part of that effort since 1985, supplementing the agency's
internal staff in developing and improving the agency's information technology
infrastructure. Recently, AiC managed a project involving the development and
implementation of two significant enhancements to application software systems
that have enabled the Commission to replace time-consuming manual applications
and related paperwork with a complete electronic services package.
The applications are iSTAR (School Transmission of Aid Records) and iGOLD
(Guarantee Origination and Loan Disbursement), both PC-based. They are designed
to help schools and lenders simplify and expedite the delivery of federally
guaranteed student loans administered by ISAC. iSTAR enables schools to
transmit loan requests directly to the Commission electronically; iGOLD provides
a similar electronic link with lenders. The resulting paperless system has
dramatically speeded up a process in which everything was hand-written and
transmitted by mail.
Disbursement time has been compressed from days to hours. iSTAR and iGOLD
and their mainframe counterparts are now involved in more than 65 percent of the
agency's loan guarantees. Together they permit a full-service electronic funds
transfer, eliminating lines of students waiting to pick up loan checks.
"AiC gives us a lot more flexibility in our approach to the challenges we
face as a state agency," Bourque said. "I can't afford to hire a specialized
skill forever when I only need it for a short time. We must continue to make
improvements in the administration and delivery of financial aid programs. At
the same time, we have to keep up with changes in Federal regulations. We need
to respond very quickly and be very agile in those responses -- and to be very
cost effective."
12
<PAGE>
REPORT OF MANAGEMENT
The consolidated financial statements of Analysts International Corporation
published in this report were prepared by company management, which is
responsible for their integrity and objectivity. The statements have been
prepared in accordance with generally accepted accounting principles applying
certain estimates and judgments as required. The financial information
elsewhere in this report is consistent with the statements.
AiC maintains an internal control structure adequate to provide reasonable
assurance its transactions are appropriately recorded and reported, its assets
are protected and its established policies are followed. The structure is
enforced by written policies and procedures, internal audit activities and a
qualified financial staff.
Our independent auditors, Deloitte & Touche LLP, provide an objective
independent review by audit of AiC's consolidated financial statements and
issuance of a report thereon. Their audit is conducted in accordance with
generally accepted auditing standards.
The Audit Committee of the Board of Directors, comprised solely of outside
directors, meets with the independent auditors and representatives from
management to appraise the adequacy and effectiveness of the audit functions,
internal control structure and quality of our financial accounting and
reporting.
/s/ Frederick W. Lang /s/ Gerald M. McGrath
Frederick W. Lang Gerald M. McGrath
Chairman and Chief Executive Officer Vice President, Treasurer and
Chief Financial Officer
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
As a means of better explaining the Company's operations and results, the
following table illustrates the relationship between revenues and expense
categories for the three years ended June 30, 1995, 1994, and 1993.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Percent of Revenues
-------------------------
Year Ended June 30, 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues 100.0% 100.0% 100.0%
Salaries, contracted services and
direct charges 71.3 71.2 70.5
Selling, administrative and other
operating costs 20.6 21.7 21.3
Non-operating income 0.4 0.1 0.3
---------------------------------------------------------------------------
Income before income taxes 8.5 7.2 8.5
Income taxes 3.3 2.7 3.3
---------------------------------------------------------------------------
Net income 5.2% 4.5% 5.2%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
</TABLE>
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The 24.1% increase in revenues between fiscal 1995 and 1994 and the 10.2%
increase between fiscal 1994 and 1993 resulted primarily from increases in
billable hours of service rendered to clients as reflected by the increases in
technical staff. Rate increases have not contributed significantly to the
revenue increases because prevailing competitive conditions in the industry have
made it difficult for the Company to increase the hourly rates it charges for
services.
Business done under separate contracts with various divisions and operating
units of one customer accounted for approximately 20%, 29% and 36% of revenues
for fiscal years 1995, 1994 and 1993, respectively. Foreign operations are
insignificant.
Personnel totalled 3,170 at June 30, 1995, compared to 2,600 at June 30, 1994
and 2,270 at June 30, 1993; substantially all of the increases consist of
billable technical staff.
Salaries, contracted services and direct charges, which represent primarily the
Company's direct labor costs, remained essentially constant as a percentage of
revenues between fiscal 1995
<PAGE>
(71.3%) and fiscal 1994 (71.2%) as a consequence of the Company's ability to
maintain a balance between its billing rates and labor costs. Maintaining this
balance has involved controlling labor costs, passing on labor cost increases
through increased billing rates where possible, and maintaining productivity
levels of its billable technical staff. Labor costs, however, are difficult to
control because the highly skilled technical personnel the Company seeks to hire
and retain are in great demand. Intense competition in the industry makes it
difficult to pass cost increases on to customers, and unfavorable economic
conditions could adversely affect productivity. The ratio of labor costs to
revenues will also be affected by outsourcing contracts recently entered into
with two major customers; these contracts are expected to generate higher
revenue volumes but at lower margins. This category of expense increased between
fiscal 1994 (71.2%) and fiscal 1993 (70.5%) because increased labor costs were
not entirely passed on to customers in the form of rate increases and because
some of the rates charged by the Company for certain services to its major
customer were significantly reduced effective as of the third quarter of fiscal
1994. While the Company has taken steps to reduce this category of expense,
there can be no assurance the Company will be able to maintain gross margins at
the levels experienced in fiscal 1995 and 1994 or to reduce costs to the
relative level experienced in fiscal 1993.
Selling, administrative and other operating costs include commissions paid to
sales representatives and recruiters, employee fringe benefits and location
costs. These costs, as a percentage of revenues, were 20.6% in fiscal 1995,
21.7% in 1994 and 21.3% in 1993. The decrease from fiscal 1994 to 1995 resulted
primarily from the Company's ability to maintain its basic administrative
structure during a period of growth and continued control of its group medical
costs. The increase from fiscal 1993 to 1994 resulted primarily from an
increase in payroll taxes which was not completely offset by cost reductions in
other areas within this category. While the Company has been successful in
controlling selling, administration and other costs and is committed to careful
management of these costs, there can be no assurance the Company will be able to
maintain these costs at their current relationship to revenues.
Inflation has not had a major impact on the Company's operations because
revenues are derived primarily from services billed at hourly rates, which are
generally subject to renegotiation on a semi-annual basis.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1995 was $39.8 million, up 26.4% from the $31.5
million at June 30, 1994, which was up 20.7% from the $26.1 million at June 30,
1993. This includes cash and cash equivalents of $12.6 million compared to
$10.7 million at June 30, 1994 and $9.9 million a year earlier and accounts
receivable of $41.7 million compared to $28.3 million at June 30, 1994 and
$23.2 million a year earlier.
The Company's primary need for working capital is to support accounts receivable
resulting from the growth in its business and to fund the time lag between
payroll disbursement and receipt of fees billed to clients. Over the past three
years, the Company has been able to support the growth in its business with
internally generated funds. The Company's outsourcing contracts with two
<PAGE>
major customers are not expected to burden working capital, even though the
ratio of current assets to current liabilities is likely to decline as a
consequence of the Company's use of subcontractors to perform substantial
amounts of the work, because the Company does not pay its subcontractors until
after collection from the client.
The Company's business is not capital intensive since the Company's services are
generally provided at the client site, where the client provides the computer
equipment, work space and other necessary facilities. In recent years, however,
the Company has established customer support facilities where it performs
software development work off the customer's premises. These facilities are
staffed by appropriate AiC management and technical personnel and include
computer equipment and telecommunications links with customer computers. For
fiscal 1995, capital expenditures, primarily for computer equipment, furniture
and leasehold improvements, totalled $1,930,000. Capital expenditures for
fiscal years 1994 and 1993 were $1,294,000 and $1,551,000, respectively. All
of these capital expenditures were funded through working capital. Fiscal 1996
capital spending is expected to be similar to fiscal 1995.
During fiscal 1995, the Company increased its regular quarterly dividends to
$.13 per share, up from $.12 declared during fiscal 1994 and the $.10 declared
during fiscal 1993. The amount of the quarterly dividend is determined based
on results of operations, available cash and anticipated cash requirements of
the business.
The Company adopted Statements of Financial Accounting Standards No. 112,
"Employers Accounting for Post Employment Benefits" and No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" in the first quarter of
fiscal 1995. The impact on the Company's financial position and results of
operations as a consequence of adopting these statements was not significant.
The Company believes internally generated funds will be sufficient to meet the
cash requirements of its business for fiscal 1996.
<PAGE>
CONSOLIDATED BALANCE SHEETS
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
June 30
--------------------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1995 1994
- ----------------------------------------------- ---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (Note A) $ 12,615 $ 10,700
Accounts receivable, less allowance for doubtful
accounts of $550 and $600, respectively 41,706 28,293
Prepaid expenses and other current assets (Note F) 2,493 2,326
--------- ---------
Total current assets 56,814 41,319
Property and equipment (Notes A and B) 5,020 4,912
Other assets (Notes C and F) 5,699 4,979
--------- ---------
$ 67,533 $ 51,210
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,241 $ 1,691
Dividend payable 943 854
Salaries and vacations 6,653 5,302
Property and payroll taxes 114 116
Other, primarily self-insured health care reserves 1,506 1,393
Income taxes payable 590 490
--------- ---------
Total current liabilities 17,047 9,846
Long-term liabilities (Note C) 5,352 4,793
Commitments (Note G) -- --
Shareholders' equity (Notes D and E):
Common stock, par value $.10 a share; authorized
20,000,000 shares; issued and outstanding
7,257,776 and 7,118,521 shares, respectively 726 712
Additional capital 10,950 9,900
Retained earnings 33,458 25,959
--------- ---------
Total shareholders' equity 45,134 36,571
--------- ---------
$ 67,533 $ 51,210
--------- ---------
--------- ---------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
Year Ended June 30
--------------------------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1995 1994 1993
- ----------------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Revenues $218,426 $175,982 $159,703
Expenses:
Salaries, contracted services and direct charges 155,743 125,285 112,644
Selling, administrative and other operating costs 44,913 38,163 34,020
-------- -------- --------
200,656 163,448 146,664
-------- -------- --------
Operating income 17,770 12,534 13,039
Non-operating income 760 241 462
-------- -------- --------
Income before income taxes 18,530 12,775 13,501
Income taxes (Note F) 7,274 4,824 5,235
-------- -------- --------
Net income $ 11,256 $ 7,951 $ 8,266
-------- --------- ---------
-------- --------- ---------
Net income per common and common
equivalent share (Note A) $ 1.55 $ 1.10 $ 1.15
-------- --------- ---------
-------- --------- ---------
Average common and common equivalent shares
outstanding 7,274,000 7,212,000 7,170,000
--------- --------- ---------
--------- --------- ---------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
Year Ended June 30
--------------------------
(IN THOUSANDS) 1995 1994 1993
- -------------- ---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $11,256 $7,951 $8,266
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,814 1,660 1,405
Loss on disposal of assets 5 61 7
Increase in deferred income tax benefit (445) (467) (675)
Increase in accounts receivable (13,413) (5,107) (3,246)
(Increase) decrease in prepaid expenses (31) (147) 66
Increase in accounts payable 5,550 21 253
Increase in salaries and vacations 1,351 756 142
Increase (decrease) in other accrued expenses 111 222 (42)
Increase (decrease) in income taxes payable 100 (219) (129)
Increase in long-term liabilities 559 477 662
------ ------ ------
Net cash provided by operating activities 6,857 5,208 6,709
Cash flows from investing activities:
Property and equipment additions (1,930) (1,294) (1,551)
Increase in annuities and cash surrender values (411) (288) (315)
Proceeds from property and equipment sales 3 65 17
------ ------ ------
Net cash used in investing activities (2,338) (1,517) (1,849)
Cash flows from financing activities:
Cash dividends (3,668) (3,265) (2,769)
Proceeds from exercise of stock options 1,064 360 433
------ ------ ------
Net cash used in financing activities (2,604) (2,905) (2,336)
------ ------ ------
Net increase in cash and equivalents 1,915 786 2,524
Cash and equivalents at beginning of year 10,700 9,914 7,390
------ ------ ------
Cash and equivalents at end of year $12,615 $10,700 $9,914
------- ------- ------
------- ------- ------
Supplemental cash flow information:
Cash paid during the year for:
Income taxes $7,619 $5,509 $6,039
Interest -- -- --
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS EXCEPT Common Additional Retained
PER SHARE AMOUNTS) Stock Capital Earnings
- ------------------- ------ -------- --------
<S> <C> <C> <C>
Balances at June 30, 1992 $ 699 $ 9,120 $15,977
Common stock issued - 68,859 shares
upon exercise of stock options 7 426
Cash dividends ($.40 per share) (2,822)
Net income 8,266
----- ----- -----
Balances at June 30, 1993 706 9,546 21,421
Common stock issued - 57,925 shares
upon exercise of stock options 6 354
Cash dividends ($.48 per share) (3,413)
Net income 7,951
----- ----- -----
Balances at June 30, 1994 712 9,900 25,959
Common stock issued - 139,255 shares
upon exercise of stock options 14 1,050
Cash dividends of ($.52 per share) (3,757)
Net income 11,256
----- ----- ------
Balances at June 30, 1995 $ 726 $10,950 $33,458
------ ------- -------
------ ------- -------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of business - Analysts International Corporation furnishes
analytical and programming services. These services include consulting, systems
analysis, design, programming and instruction in the use of computer programs.
Consolidation - The financial statements include the accounts of the Company and
its subsidiary. All intercompany accounts and transactions have been
eliminated.
Depreciation - Property and equipment is being depreciated using the straight-
line method over the estimated useful lives (3-40 years) of the assets for
financial statement purposes and accelerated methods for income tax purposes.
Revenues - The Company grants credit to customers, a significant portion of whom
are engaged in the electronics and manufacturing industries. One customer and
its various divisions and operating units accounted for approximately 20%, 29%
and 36% of revenues in fiscal 1995, 1994 and 1993, respectively. Revenue is
recognized on contracts as services are performed.
Net income per share - Net income per share is computed based on the weighted
average number of common and common equivalent shares outstanding, including the
dilutive effect of stock options. Fully diluted net income per share is
substantially the same.
Cash equivalents - Temporary cash investments in money market accounts and
Treasury Bills are considered to be cash equivalents.
Shares reserved - At June 30, 1995, there were 8,685,000 shares reserved for
issuance under the stock option plans and the shareholders' rights plan. (See
also Notes D and E.)
B. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
June 30
-----------------------
(In thousands) 1995 1994
---- ----
<S> <C> <C>
Cost:
Land $ 74 $ 74
Building and improvements 1,447 1,399
Office furniture & equipment 11,436 9,623
------- ------
Total 12,957 11,096
Accumulated depreciation (7,937) (6,184)
------- ------
$ 5,020 $ 4,912
------- ------
------- ------
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
C. DEFERRED COMPENSATION
The Company has a Deferred Compensation Plan for key management employees as
determined by the Board. Included in long-term liabilities at June 30, 1995 and
1994 is $5,278,000 and $4,570,000 respectively, representing the Company's
liability under the Plan. This liability is being funded by the purchase of
life insurance and annuity contracts. Included in other assets at June 30, 1995
and 1994 is $3,972,000 and $3,513,000, respectively, representing the carrying
value of annuities, which approximates market value, and insurance cash value.
Deferred compensation expense for the fiscal years 1995, 1994 and 1993 was
approximately $708,000, $626,000 and $810,000, respectively.
D. STOCK OPTION PLANS
The Company has granted options to employees for the purchase of common stock.
The options are exercisable 25% annually beginning one year after date of grant
at the fair market value at the date of the grant and expire five years after
grant if not exercised. At June 30, 1995, there were options for 394,017 shares
available to be granted under the stock option plans. Option information for
the three years ended June 30, 1995 is as follows:
<TABLE>
<CAPTION>
Number
of Shares Price Range
---------------- -----------------
<S> <C> <C>
Outstanding at June 30, 1992 272,569 $3.33 - 9.17
Cancelled (6,985) 7.33
Granted 199,500 16.00
Exercised (68,859) 3.33 - 9.17
---------------- -----------------
Outstanding at June 30, 1993 396,225 7.33 - 16.00
Exercised (57,925) 7.33
---------------- -----------------
Outstanding at June 30, 1994 338,300 7.33 - 16.00
Granted 129,358 19.25 - 27.00
Exercised (149,279) 7.33 - 16.00
---------------- -----------------
Outstanding at June 30, 1995 319,379 $7.33 - 27.00
---------------- -----------------
---------------- -----------------
Exercisable at June 30, 1995 89,896 $7.33 - 16.00
---------------- -----------------
---------------- -----------------
</TABLE>
The options outstanding at June 30, 1995 expire in the years ending June 30 as
follows: 9,525 in 1996, 1,125 in 1997, 179,371 in 1998, none in 1999 and
129,358 in 2000.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
E. SHAREHOLDERS' RIGHTS PLAN
On June 15, 1989 the Board of Directors adopted a common stock shareholders'
rights plan. Under this plan, the Board of Directors declared a dividend of one
common share purchase right for each outstanding share of common stock and stock
options granted and available for grant. The rights, which expire on June 16,
1999, are exercisable only under certain conditions, and when exercisable the
holder will be entitled to purchase from the Company one share of common stock
at a price of $53.33, subject to certain adjustments. The rights will become
exercisable after a person or group acquires beneficial ownership of 20 percent
or more (or as low as 10 percent as the Board of Directors may determine) of the
Company's common stock or after a person or group announces an offer, the
consummation of which would result in such person or group owning 20 percent or
more of the common stock.
If the Company is acquired at any time after the rights become exercisable, the
rights will be adjusted so as to entitle a holder to purchase a number of shares
of common stock of the acquiring company at one-half of their market value. If
any person or group acquires beneficial ownership of 20 percent or more of the
Company's shares, the rights will be adjusted so as to entitle a holder (other
than such person or group whose rights become void) to purchase a number of
shares of common stock of Analysts International Corporation at one-half of
their market value or the Board of Directors may exchange the rights, in whole
or in part, at an exchange ratio of one common share per right (subject to
adjustment).
At any time prior to an acquisition by a person or group of beneficial ownership
of 20 percent or more of the Company's shares, the Board of Directors may redeem
the rights at $.01 per right.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
F. INCOME TAXES
The provision for income taxes charged was as follows:
<TABLE>
<CAPTION>
Year Ended June 30
-----------------------
(IN THOUSANDS)
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Currently payable:
Federal $6,477 $4,456 $4,962
State 1,242 835 948
----- --- ---
7,719 5,291 5,910
Deferred:
Federal (377) (415) (610)
State (68) (52) (65)
--- --- ---
(445) (467) (675)
---- ---- ----
Total $7,274 $4,824 $5,235
----- ----- -----
----- ----- -----
</TABLE>
Net deferred tax assets are comprised of the following:
<TABLE>
<CAPTION>
Year Ended June 30
-------------------
(In thousands) 1995 1994
---- ----
<S> <C> <C>
Deferred compensation $2,072 $1,782
Accrued vacation and
compensatory time 939 881
Self-insured health care reserves 591 527
Allowance for doubtful accounts 216 234
Other 248 282
--- ---
Deferred tax assets 4,066 3,706
Depreciation (374) (450)
Other (121) (130)
----- -----
Deferred tax liabilities (495) (580)
---- ----
Net deferred tax assets $3,571 $3,126
----- -----
----- -----
Whereof:
Current $1,844 $1,708
Noncurrent 1,727 1,418
----- -----
$3,571 $3,126
----- -----
----- -----
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The provision for income taxes differs from the amount of income tax determined
by applying the federal statutory income tax rates to pretax income as a result
of the following differences:
<TABLE>
<CAPTION>
Year Ended June 30
------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rates 35.0% 35.0% 34.0%
State and local taxes,
net of federal benefit 4.2 4.2 4.3
Other 0.1 (1.4) 0.5
----- ----- -----
Effective tax rates 39.3% 37.8% 38.8%
----- ----- -----
----- ----- -----
</TABLE>
No legislation was enacted during fiscal year 1995 affecting the corporate rate.
Therefore, no related adjustment was made to the deferred income tax accounts
during 1995. The Company increased its deferred tax asset in 1994 as a result
of legislation enacted increasing the top corporate income tax rate from 34% to
35%. The effect of this is included as a credit in "other" in the above table.
In July 1993, the Company adopted Statement of Financial Accounting Standards
No. 109 (FAS 109) Accounting for Income Taxes. The adoption of FAS 109 changes
the Company's method of accounting for income taxes from the deferred method
(APB 11) to an asset and liability approach. Previously the Company deferred
the past tax effects of timing differences between financial reporting and
taxable income. The asset and liability approach requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of other
assets and liabilities. The change in accounting method did not have a material
cumulative effect or impact on the results of fiscal 1994 or 1995 operations.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G. COMMITMENTS
At June 30, 1995 aggregate net minimum rental commitments under noncancellable
operating leases having an initial or remaining term of more than one year are
payable as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Year ending June 30, 1996 $ 2,504
1997 2,179
1998 1,939
1999 1,530
2000 1,281
Later 1,767
-----
Total minimum obligation $11,200
------
------
</TABLE>
Rent expense, primarily for office facilities, for the years ended June 30,
1995, 1994 and 1993 was $2,167,000, $2,132,000, and $2,506,000, respectively.
The Company has compensation arrangements with two of its senior executives and
certain other employees which provide for certain payments in event of a change
of control of the Company.
The Company also sponsors a 401(k) plan. Substantially all employees are
eligible to participate and may contribute up to 15% of their pretax earnings,
subject to IRS maximum contribution amounts. The Company makes matching
contributions to the plan up to a specified percentage. The Company's
contributions vest after the employee has completed seven years of service and
for 1995, 1994 and 1993 amounted to approximately $581,000, $530,000, and
$407,000 respectively.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Analysts International Corporation
Minneapolis, Minnesota
We have audited the accompanying consolidated balance sheets of Analysts
International Corporation and its subsidiary (the Company) as of June 30, 1995
and 1994 and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended June 30, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the consolidated financial position of the Company as of June 30, 1995
and 1994, and the results of their operations and their cash flows for each of
the three years in the period ended June 30, 1995, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
August 14, 1995
<PAGE>
FIVE YEAR FINANCIAL SUMMARY
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
(Dollars in thousands except Fiscal Year
per share amounts) 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $218,426 $175,982 $159,703 $129,558 $116,788
Salaries, contracted services
and direct charges 155,743 125,285 112,644 91,255 82,480
Non-operating income 760 241 462 463 658
Income before income taxes 18,530 12,775 13,501 8,684 8,950
Income taxes 7,274 4,824 5,235 3,310 3,363
- -------------------------------------------------------------------------------------------------------------------
Net income 11,256 7,951 8,266 5,374 5,587
Total assets 67,533 51,210 44,907 38,091 32,146
Long-term liabilities 5,352 4,793 4,316 3,654 2,600
Shareholders' equity 45,134 36,571 31,673 25,796 22,736
Per share data:
Net income 1.55 1.10 1.15 .76 .79
Cash dividends .52 .48 .40 .37 .37
Shareholders' equity 6.22 5.14 4.48 3.69 3.28
Average common and
common equivalent shares
outstanding 7,274,000 7,212,000 7,170,000 7,066,000 7,026,000
Number of personnel 3,170 2,600 2,270 2,070 1,750
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STOCK DATA Trailing
Market Range Dividend 12-Month
FISCAL 1995 High Low Close Declared P/E Ratio
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fourth Quarter $27 3/4 $22 1/2 $26 $ .13 16.8
Third Quarter 23 1/4 19 3/4 23 1/4 .13 16.6
Second Quarter 20 3/4 17 20 1/2 .13 16.2
First Quarter 17 1/2 14 1/2 17 1/2 .13 15.0
FISCAL 1994
- ---------------------------------------------------------------------------------------------------------------------
Fourth Quarter $17 1/4 $15 1/2 $16 1/2 $ .12 15.0
Third Quarter 18 14 1/2 17 1/2 .12 15.5
Second Quarter 22 15 3/4 18 .12 15.7
First Quarter 23 1/2 18 1/2 21 7/8 .12 18.7
</TABLE>
Common shares are traded in the Nasdaq National Market under the symbol ANLY.
As of August 15, 1995, there were approximately 1,460 shareholders of record and
appropriately 7,500 shareholders for whom securities firms act as nominees. The
above table sets forth for the periods indicated the market prices for the
Company's Common Stock as reported by Nasdaq, dividends declared and the
trailing 12-months closing price/earnings ratio for each quarterly period.
Prices reflect the 3 for 2 stock split paid September 30, 1993, and have been
rounded to the nearest one-eighth.
The Board of Directors has adopted a policy of declaring regular quarterly
dividends subject to favorable earnings and cash flow. Accordingly, the Company
declared quarterly dividends of $.13 a share in fiscal 1995 and $.12 a share in
fiscal 1994.
On August 17, 1995, the Board of Directors increased the quarterly cash dividend
to $.15 a share.
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
QUARTERLY REVENUES AND INCOME
(Unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
First Second Third Fourth
Fiscal 1995 Quarter Quarter Quarter Quarter Annual
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Revenues $48,395 $50,719 $55,220 $64,092 $218,426
Income before income taxes 3,987 4,273 4,734 5,536 18,530
Income taxes 1,555 1,665 1,867 2,187 7,274
Net income 2,432 2,608 2,867 3,349 11,256
Net income per share .34 .36 .39 .46 1.55
Fiscal 1994
Revenues $41,737 $42,859 $45,052 $46,334 $175,982
Income before income taxes 3,029 3,318 2,764 3,664 12,775
Income taxes 1,090 1,291 1,050 1,393 4,824
Net income 1,939 2,027 1,714 2,271 7,951
Net income per share .27 .28 .24 .31 1.10
</TABLE>
<PAGE>
BOARD OF DIRECTORS OFFICERS
Frederick W. Lang Frederick W. Lang
Chairman and Chief Chairman and Chief
Executive Officer Executive Officer
Victor C. Benda Victor C. Benda
President and Chief President and Chief
Operating Officer Operating Officer
Willis K. Drake Thomas R. Mahler
Retired Chairman of the Board Secretary and General Counsel
Data Card Corporation
Gerald M. McGrath
Margaret A. Loftus Vice President, Treasurer
Principal, Loftus Brown-Wescott, Inc. and Chief Financial Officer
Edward M. Mahoney Richard J. Chiappetta
Retired Chairman and Vice President, Central Region
Chief Executive Officer
Fortis Investors, Inc. Philip P. Colligan
and Fortis Advisers, Inc. Vice President, Eastern Region
Robb L. Prince Robert J. Pugh
Vice President and Treasurer Vice President, Midwest Region
Josten's, Inc.
Roman E. Rowan
DIRECTOR EMERITUS Vice President, Western Region
James E. Thornton
Retired Chairman of the Board Sarah P. Spiess
Network Systems Corporation Vice President, Southern Region
Richard A. Ferrera
Vice President, Program Management
George R. Zak
Vice President, National Marketing
Marti R. Charpentier
Controller and Assistant Treasurer
Colleen M. Davenport
Assistant Secretary
<PAGE>
10-K AVAILABLE
A copy of the Company's 1995
Annual Report on Form 10-K,
filed with the Securities and
Exchange Commission, is
available to AiC security
holders without charge upon
request to the Vice President,
Treasurer, Analysts
International Corporation,
7615 Metro Boulevard,
Minneapolis, Minnesota 55439-3050.
STOCK TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
(800) 426-5523
EXPECTED DIVIDEND PAYMENT DATES
November 15, 1995
February 15, 1996
May 15, 1996
August 15, 1996
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Minneapolis, Minnesota
ANNUAL MEETING
The 1995 Annual Meeting
of Shareholders will be
held on October 17, 1995
at 3 p.m. at the
Edina Country Club
5100 Wooddale Avenue
Edina, Minnesota.
QUARTERLY REPORTS
Analysts International Corporation is sending
quarterly earnings releases directly to share-
holders in fiscal 1996, instead of traditional printed
quarterly reports. Many companies now follow this
approach, which gives shareholders pertinent information
faster, at lower cost to the Company.
<PAGE>
Contains 50% total recycled materials; 50% pre-consumer.
<PAGE>
CORPORATE INFORMATION
CORPORATE HEADQUARTERS
7615 Metro Boulevard
Minneapolis, Minnesota 55439-3050
(612) 835-5900
(800) 800-5044
REGIONAL OFFICES
CENTRAL
7340 Shadeland Station, Suite 100
Indianapolis, Indiana 46256-3919
(317) 842-1100
EASTERN
One Penn Plaza, Suite 1910
New York, New York 10119-0002
(212) 465-1660
MIDWEST
600 Emerson Road, Suite 200
St. Louis, Missouri 63141-6708
(314) 997-1746
SOUTHERN
Perimeter 400 Center, Suite 850
1100 Johnson Ferry Road NE
Atlanta, Georgia 30342-1746
(404) 256-5190
WESTERN
44 Montgomery Street, Suite 2365
San Francisco, California 94104-4710
(415) 352-0760
DIVISIONS
AiC TECHWEST
7800 E Union Avenue, Suite 630
Denver, Colorado 80237-2755
(303) 721-0341
(800) 721-0772
AiC NATIONAL PROJECTS OFFICE
621 NW 53rd Street, Suite 140
Boca Raton, Florida 33487-8211
(407) 241-5912
BRANCH OFFICES
ATLANTA
Perimeter 400 Center, Suite 850
1100 Johnson Ferry Road NE
Atlanta, Georgia 30342-1746
(404) 256-5190
AUSTIN
LaCosta Green
1033 LaPosada Drive, Suite 300
Austin, Texas 78752-3824
(512) 206-2700
BOCA RATON
621 NW 53rd Street, Suite 140
Boca Raton, Florida 33487-8211
(407) 241-5912
CHICAGO
1101 Perimeter Drive, Suite 500
Schaumburg, Illinois 60173-5060
(708) 619-4673
CINCINNATI
Governor's Pointe
4770 Duke Drive, Suite 207
Mason, Ohio 45040-9374
(513) 398-7811
CLEVELAND
6133 Rockside Road, Suite 301
Cleveland, Ohio 44131-2220
(216) 524-8990
COLUMBUS
471 E Broad Street, Suite 2001
Columbus, Ohio 43215-3861
(614) 224-6790
<PAGE>
DALLAS
3030 LBJ Freeway, Suite 820
Dallas, Texas 75234-7703
(214) 243-2001
DENVER
7800 E Union Avenue, Suite 600
Denver, Colorado 80237-2755
(303) 721-6200
DETROIT
3000 Town Center, Suite 570
Southfield, Michigan 48075-1297
(810) 353-7230
HOUSTON
1415 N Loop West, Suite 300
Houston, Texas 77008-1645
(713) 869-3420
INDIANAPOLIS
7340 Shadeland Station, Suite 100
Indianapolis, Indiana 46256-3919
(317) 842-1100
KANSAS CITY
One Main Plaza
4435 Main Street, Suite 730
Kansas City, Missouri 64111-1858
(816) 531-5050
LEXINGTON
2365 Harrodsburg Road, Suite B450
Lexington, Kentucky 40504-3335
(606) 223-0001
MINNEAPOLIS
8200 Normandale Boulevard, Suite 400
Minneapolis, Minnesota 55437-1074
(612) 897-4590
NEW JERSEY METRO
111 Wood Avenue S
Iselin, New Jersey 08830-2703
(908) 906-0100
NEW YORK CITY
One Penn Plaza, Suite 1910
New York, New York 10119-0002
(212) 465-1660
OMAHA
6910 Pacific Street, Suite 204
Omaha, Nebraska 68106-1045
(402) 558-2800
PHOENIX
11024 N 28th drive, Suite 240
Phoenix, Arizona 85029-4379
(602) 789-7200
RALEIGH/DURHAM
2500 Gateway Centre Boulevard,
Suite 575
Morrisville, North Carolina 27560-9121
(919) 460-6141
ROCHESTER, MINNESOTA
1530 Greenview Drive SW, Suite 107
Rochester, Minnesota 55902-1080
(507) 280-6663
ROCHESTER, NEW YORK
16 W Main Street, Suite 200
Rochester, New York 14614-1601
(716) 325-6640
ST. LOUIS
600 Emerson Road, Suite 200
St. Louis, Missouri 63141-6708
(314) 997-1746
SAN FRANCISCO AREA
1850 Gateway Boulevard, Suite 120
Concord, California 94520-3299
(510) 687-5522
SEATTLE
10655 NE 4th Street, Suite 804
Bellevue, Washington 98004-5022
(206) 454-2500
<PAGE>
TAMPA
600 N Westshore Boulevard, Suite 304
Tampa, Florida 33609-1145
(813) 281-0458
TULSA
Corporate Place
5800 E Skelly Drive, Suite 1100
Tulsa, OK 74135-6448
(918) 663-0030
FIELD OFFICES
Akron/Canton, Ohio (216) 644-1166
Boston, Massachusetts (617) 229-5840
Boulder, Colorado (303) 442-7338
Charlotte, North Carolina (704) 594-6087
Des Moines, Iowa (515) 221-9822
Los Angeles, California (714) 450-8930
Miami, Florida (800) 597-5912
Philadelphia, Pennsylvania (610) 941-2979
Sacramento, California (916) 565-7458
San Jose, California (408) 943-6565
Toronto, Ontario, Canada (416) 322-3822
Washington, D.C. (703) 827-4107
AiC Analysts Limited
Cambridge, England (44) 1223 300044
<PAGE>
EXHIBIT 22
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 22
SUBSIDIARIES OF REGISTRANT
YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
State or Percentage
Jurisdiction of Voting
of Incorporation Securities Owned
---------------- ----------------
Subsidiaries
- ------------
<S> <C> <C>
AiC Analysts Limited United Kingdom 100%
</TABLE>
<PAGE>
EXHIBIT 24
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements Nos. 33-
19180, 33-89896, 33-25244 and 33-87626 of Analysts International Corporation on
Form S-8 of our reports dated August 14, 1995, appearing and incorporated by
reference in this Annual Report on Form 10-K of Analysts International
Corporation for the year ended June 30, 1995.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
September 28, 1995
<PAGE>
EXHIBIT 25
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Willis K. Drake
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Willis K. Drake, to me known to be the person described in and who executed
the foregoing instrument and acknowledged that he executed the same as his free
act and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Margaret Loftus
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Margaret Loftus, to me known to be the person described in and who executed
the foregoing instrument and acknowledged that he executed the same as his free
act and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Edward M. Mahoney
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Edward M. Mahoney, to me known to be the person described in and who
executed the foregoing instrument and acknowledged that he executed the same as
his free act and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Robb Prince
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Robb Prince, to me known to be the person described in and who executed the
foregoing instrument and acknowledged that he executed the same as his free act
and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Frederick W. Lang
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Frederick W. Lang, to me known to be the person described in and who
executed the foregoing instrument and acknowledged that he executed the same as
his free act and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
POWER OF ATTORNEY
TO SIGN
ANNUAL REPORT ON FORM 10-K
KNOW ALL PEOPLE BY THESE PRESENTS, that the undersigned hereby appoints
F.W. Lang or Thomas R. Mahler, or either of them, my true and lawful attorneys
in fact, for me and in my name, place and stead, to sign and affix my name as a
Director of Analysts International Corporation to the Annual Report on Form 10-K
for the year ended June 30, 1995 and all amendments thereto to be filed by said
Company with the Securities and Exchange Commission, Washington, D.C. as
required by Section 13 of the Securities Exchange Act of 1934, as amended
granting and giving unto said attorneys in fact, or any one of them, full
authority and power to do and perform any and all acts necessary or incidental
to the performance and execution of powers herein expressly granted, with full
power to do and perform all acts authorized hereby as fully to all intents and
purposes as I might or could do if personally present, with full power of
substitution.
IN TESTIMONY WHEREOF, I have hereunto set my hand this 27th day of
September, 1995.
/s/ Victor C. Benda
----------------------------------------
STATE OF MINNESOTA )
) SS
COUNTY OF HENNEPIN )
On the 27th day of September, 1995, before me, personally
came Victor C. Benda, to me known to be the person described in and who executed
the foregoing instrument and acknowledged that he executed the same as his free
act and deed.
/s/ Charles M. Mannie
----------------------------------------
Notary Public
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