<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
___________
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
___________
For the quarter ended: Commission file number:
September 30, 1995 0-4090
___________
ANALYSTS INTERNATIONAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Minnesota 41-0905408
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
7615 Metro Boulevard
Minneapolis, MN 55439
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Telephone Number: (612) 835-5900
___________
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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
___________
As of October 30, 1995, 7,273,256 shares of the Registrant's Common Stock were
outstanding.
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Consolidated Balance Sheets
September 30, 1995 (Unaudited) and June 30, 1995 1
Condensed Consolidated Statements of Income
Three months ended September 30, 1995 and 1994 (Unaudited) 2
Condensed Consolidated Statements of Cash Flows
Three months ended September 30, 1995 and 1994 (Unaudited) 3
Notes to Condensed Consolidated Financial
Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5-6
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
(In thousands) 1995 1995
--------------- ---------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 15,041 $ 12,615
Accounts receivable, less allowance
for doubtful accounts 42,637 41,706
Other current assets 2,468 2,493
------ -----
Total current assets 60,146 56,814
Property and equipment, net 5,302 5,020
Other assets 5,855 5,699
------ -----
$ 71,303 $ 67,533
------ ------
------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,893 $ 7,241
Salaries and vacations 5,930 6,653
Income taxes payable 1,922 590
Other, primarily self-insured health care reserves 3,162 2,563
------ ------
Total current liabilities 18,907 17,047
Long-term liabilities 5,495 5,352
Shareholders' equity (Note 2) 46,901 45,134
------ ------
$ 71,303 $ 67,533
------- -------
------- -------
</TABLE>
Note: The balance sheet at June 30, 1995 has been taken from the audited
financial statements at that date, and condensed.
See notes to condensed consolidated financial statements.
1
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
(Dollars in thousands Three Months Ended
except per share amounts) September 30
- ------------------------- ---------------------
1995 1994
---- ----
<S> <C> <C>
Revenues $73,071 $48,395
Expenses:
Salaries, contracted
services and direct charges 55,312 34,086
Selling, administrative and other
operating costs 13,373 10,438
------ ------
Total expenses 68,685 44,524
------ ------
Operating income 4,386 3,871
Other income 258 116
---- ----
Income before income taxes 4,644 3,987
Income taxes 1,835 1,555
------ ------
Net income $ 2,809 $ 2,432
------ ------
------ ------
Per common share:
- -----------------
Net income $ .38 $ .34
------ ------
------ ------
Dividends paid $ .13 $ .12
------ ------
------ ------
Average common and common
equivalent shares outstanding 7,380,000 7,192,000
--------- ---------
--------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30
-------------------
(Dollars in thousands) 1995 1994
- ---------------------- ---- ----
<S> <C> <C>
Net cash provided by operating activities $4,156 $1,969
Cash flows from investing activities:
Property and equipment additions (764) (434)
Increase in annuities and cash surrender values (72) (79)
----- ----
Net cash used in investing activities (836) (513)
Cash flows from financing activities:
Cash dividends (943) (853)
Proceeds from exercise of stock options 49 24
--- ---
Net cash used in financing activities (894) (829)
----- ----
Net change in cash and equivalents 2,426 627
Cash and equivalents at beginning of period 12,615 10,700
------ ------
Cash and equivalents at end of period $ 15,041 $ 11,327
------- -------
------- -------
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Condensed Consolidated Financial Statements - The condensed
consolidated balance sheet as of September 30, 1995, the condensed
consolidated statements of income for the three month periods ended
September 30, 1995 and 1994 and the condensed consolidated statements
of cash flows for the three month periods then ended have been
prepared by the Company, without audit. In the opinion of management,
all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and the cash flows at September 30, 1995 and for the
periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's June 30, 1995 annual report to shareholders.
2. SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1995
------------------
(In thousands)
<S> <C>
Balance at beginning of period $ 45,134
Cash dividends declared:
August 17, 1995 at $.15 per share (1,091)
Proceeds upon exercise of stock options 49
Net income 2,809
------
Balance at end of period $ 46,901
------
------
</TABLE>
4
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended September 30, 1995 and 1994
CHANGES IN FINANCIAL CONDITION
Working capital at September 30, 1995 was $41.2 million, up 3.7% from the $39.8
million at June 30, 1995. This includes cash and cash equivalents of $15.0
million compared to $12.6 million at June 30, 1995 and accounts receivable of
$42.6 million compared to $41.7 million at June 30, 1995.
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
years, the Company has been able to support the growth in its business with
internally generated funds. The Company's outsourcing contracts with two major
customers are not expected to burden working capital, even though the ratio of
current assets to current liabilities is likely to decline. This is a
consequence of the Company's use of subcontractors to perform substantial
amounts of the work and that work not being paid for until after collection from
the client.
On August 17, 1995 the Board of Directors increased the Company's regular
quarterly dividend to $.15 per share and declared a dividend payable November
15, 1995 to shareholders of record on October 31, 1995.
The Company believes funds generated from its business and current cash balances
are adequate to meet demands placed upon its resources by its operations and the
payment of quarterly dividends.
5
<PAGE>
RESULTS OF OPERATIONS
Revenues for the quarter ended September 30, 1995 increased 51% over the same
period a year ago. This revenue increase resulted primarily from increases in
billable hours of service rendered to clients, of which approximately $12.4
million is attributable to a major outsourcing contract which became effective
June 1, 1995. Rate increases have not contributed significantly to the revenue
increase because prevailing competitive conditions in the industry have made it
difficult for the Company to increase the hourly rates it charges for services.
Personnel totalled 3,350 at September 30, 1995, compared to 2,800 at September
30, 1994, an increase of 19.6%. Substantially all of the increase consists of
billable technical staff.
Salaries, contracted services and direct charges, which represent primarily the
Company's direct labor cost, were 75.7% of revenues for the three months
ended September 30, 1995 compared to 70.4% for the same period a year ago. This
category of expense includes the fees for the contracted services of
subcontractors who are necessary to support the Company with the major
outsourcing contract referred to above. Excluding both revenues and fees for
the contracted services of subcontractors, this category of expense as a
percentage of revenue would be at 71.3%, compared to 70.4% for the same quarter
in fiscal 1995. While the Company has taken steps to control this category of
expense, there can be no assurance the Company will be able to maintain or
improve this level because intense competition for business can adversely affect
rate increases and competition for technical personnel makes it difficult to
control labor costs.
Selling, administrative and other operating costs, which include commissions,
employee fringe benefits and location costs, represented 18.3% of revenues for
the three months ended September 30, 1995 compared to 21.6% for the same period
a year ago. Excluding the $12.4 million of revenue realized from the
outsourcing contract referred to above, this percentage would have been 22.0%.
While the Company has been successful in controlling selling, administrative and
other operating costs and is committed to careful cost management, there can be
no assurance the Company will be able to maintain these costs at their current
relationship to revenues.
6
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 - Computation of Net Income Per Share.
(b) There were no reports on Form 8-K filed for the three months
ended September 30, 1995.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
ANALYSTS INTERNATIONAL CORPORATION
(Registrant)
Date November 13, 1995 By /s/ Gerald M. McGrath
----------------- ----------------------------------
Gerald M. McGrath
Treasurer and Chief Financial Officer
Date November 13, 1995 By /s/ Marti R. Charpentier
----------------- ----------------------------------
Marti R. Charpentier
Controller and Assistant
Treasurer (Chief Accounting Officer)
8
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT EXHIBIT PAGE NO.*
11 Computation of Net Income Per Share
* Page numbers in the sequential numbering system of the manually signed
original report.
<PAGE>
Exhibit No. 11
<PAGE>
EXHIBIT NO. 11
ANALYSTS INTERNATIONAL CORPORATION
COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
September 30
(IN THOUSANDS EXCEPT ---------------------
PER SHARE AMOUNTS) 1995 1994
- ------------------- ---- ----
<S> <C> <C>
PRIMARY:
Weighted average number of common
shares outstanding 7,264 7,120
Dilutive stock options after application
of treasury stock method 116 72
---- ----
Weighted average number of common and
common equivalent shares outstanding 7,380 7,192
----- -----
----- -----
Net income $2,809 $2,432
----- -----
----- -----
Per share amount $ .38 $ .34
----- -----
----- -----
FULLY DILUTED:
Weighted average number of common
shares outstanding 7,264 7,120
Dilutive stock options based on the treasury
stock method using the end of the period market
price, if higher than average market price 134 97
----- -----
Weighted average number of common and
common equivalent shares outstanding 7,398 7,217
----- -----
----- -----
Net income $2,809 $2,432
----- -----
----- -----
Per share amount $ .38 $ .34
----- -----
----- -----
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 15,041
<SECURITIES> 0
<RECEIVABLES> 43,179
<ALLOWANCES> 542
<INVENTORY> 0
<CURRENT-ASSETS> 60,146
<PP&E> 13,709
<DEPRECIATION> 8,407
<TOTAL-ASSETS> 71,303
<CURRENT-LIABILITIES> 18,907
<BONDS> 5,495
<COMMON> 727
0
0
<OTHER-SE> 46,174
<TOTAL-LIABILITY-AND-EQUITY> 71,303
<SALES> 73,071
<TOTAL-REVENUES> 73,071
<CGS> 55,312
<TOTAL-COSTS> 55,312
<OTHER-EXPENSES> 13,373
<LOSS-PROVISION> (8)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,644
<INCOME-TAX> 1,835
<INCOME-CONTINUING> 2,809
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,809
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
