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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, 1996
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OR
( ) Transition Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Commission file number 0-4090
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ANALYSTS INTERNATIONAL CORPORATION
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(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
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(Title of class)
Common Share Purchase Rights
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(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
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The aggregate market value of the voting stock (Common Stock) held by
non-affiliates of the registrant as of August 30, 1996 was $244,684,329 based
upon the closing price as reported by Nasdaq.
As of August 30, 1996 there were 7,326,281 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, 1996 (Parts I and II) and (ii) proxy statement dated
September 5, 1996 (Part III).
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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 consulting, project
management, systems analysis and design, programming, software maintenance and
training.
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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 1996 revenues were derived from services rendered to customers in the
following industry groups:
Approximate Percent
Industry GroupFY 1996 Revenues
------------------------------
Telecommunications 29.5%
Electronics 23.6%
Services 9.6%
Manufacturing 8.7%
Oil and Chemical 5.5%
Financial 5.0%
Insurance/Health Care 4.6%
Merchandising 3.6%
Food 3.2%
Government 1.6%
Power and Utility 1.6%
Transportation 1.3%
Other 2.2%
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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 of design specifications for updating a Project
Management Information System for BASF Corporation; design, development and
implementation of a new sales and marketing system for M.A. Hanna Company; and
design and development of a new international pricing system for United Van
Lines. 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 840 clients, of which
approximately 320 were new clients, and was engaged in approximately 5,800
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
substantially all of its branch offices to various divisions of International
Business Machines Corporation (IBM), the aggregate revenues from which exceeded
10% of the registrant's revenues for the fiscal year. The loss of IBM would
have a material adverse impact on the registrant. In July of 1995 the
registrant 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 under IBM's
National Procurement initiative which IBM instituted with the intention of using
primary and secondary vendors to provide substantially all of IBM's needs for
temporary computer software personnel. IBM's National Procurement initiative
requires participating vendors such as the registrant to accept lower hourly
rates in return for the opportunity to do a greater volume of business with IBM.
During fiscal 1996 the increased
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volume of business done with IBM more than offset the reduced rate structure,
and the registrant believes it is performing satisfactorily under its national
contract with IBM. There can be no assurance, however, that volume will
continue to offset lower rates, nor can there be assurance the registrant will
retain its status as a primary or secondary vendor to IBM under the national
contract.
During the fiscal year, the registrant also rendered services through five
(5) of its branch offices to various divisions of U S West Inc., the aggregate
revenues from which exceeded 10% of the registrant's revenues for the fiscal
year. The loss of U S West Inc. would have a material adverse impact on the
registrant's revenues. In June of 1995 the registrant entered into a
multi-year agreement with U S West Inc. under which it will be the principal
vendor to provide technical personnel to U S West Inc.'s data processing
operations. In addition to the approximately 220 programmers and other
technical personnel it had on assignment at US West Inc. as of the end of the
fiscal year, the registrant is also responsible for managing subcontractors
who provide approximately 700 technicians.
No other customer accounted for more than 10% of the registrant's fiscal
1996 revenues.
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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, Cincinnati,
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, Tampa and Tulsa.
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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 95 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 100 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, CGA 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 smaller
than 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.
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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 3,770 personnel. Of these, approximately
3,200 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.
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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 1996 Annual Report to Shareholders.
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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 1996 fiscal year.
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EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Title
- ----- --- ------
Frederick W. Lang 72 Chairman and Chief Executive Officer
since 1989; President and Chief
Executive Officer from 1966-1989;
Treasurer from 1987-1989.
Victor C. Benda 65 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 50 Secretary since 1979; General Counsel
since 1982.
Gerald M. McGrath 57 Treasurer since 1989; Vice President,
Finance since 1988; Assistant Treasurer
from 1976 to 1989; Controller from 1966
to 1989.
Terms of office expire October 17, 1996.
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PART II
The following portions of the registrant's annual report to shareholders for the
fiscal year ended June 30, 1996 are incorporated by reference in response to
Items 5, 6, 7 and 8 as follows:
Items in Form 10-K Caption or Section and Page in Annual Report
- ------------------ ---------------------------------------------------------
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
(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.
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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, 1996, filed pursuant to Regulation 14A, as
follows:
Items in Form 10-K Caption and Page in Definitive Proxy Statement
- ------------------ ----------------------------------------------
10 Election of Directors 2-3
11 Board Committees and Compensation and
Executive Compensation 3, 7-11
12 Election of Directors and Principal
Shareholders 2-3, 13
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1996:
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;
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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.
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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, 1996:
Pages in Annual Report
----------------------
Consolidated Balance Sheets at June 30, 1996 and 1995 16
Consolidated Statements of Income for each of the
three years in the period ended June 30, 1996 17
Consolidated Statements of Cash Flows for each of the
three years in the period ended June 30, 1996 18
Consolidated Statements of Shareholders' Equity for
each of the three years in the period ended June 30, 1996 19
Notes to Consolidated Financial Statements 20-21
Independent Auditors' Report 22
A.2 CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
Page Herein
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Independent Auditors' Report 18
Schedule II. Valuation and Qualifying Accounts 19
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.
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A.3 EXHIBITS
Exhibit Number Exhibit Page
- -------------- ------------
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).
4-d Second Amendment to Rights Agreement dated as of
April 30, 1996 between Analysts International
Corporation and Norwest Bank Minnesota as Rights
Agent.
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).
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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 1996 Annual Report to Shareholders.
21 Subsidiaries of Registrant.
23 Independent Auditors' Consent.
24 Powers of Attorney.
27 Financial Data Schedule
B. REPORTS ON FORM 8-K
There were no reports on Form 8-K for the three months ended June 30, 1996.
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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, 1996 and 1995, and for each of the
three years in the period ended June 30, 1996, and have issued our report
thereon dated August 15, 1996; such financial statements and report are included
in your 1996 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 15, 1996
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ANALYSTS INTERNATIONAL CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Balance at Charged to Deductions Balance
beginning costs 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, 1996 $550,000 $108,000 $158,000 $500,000
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
</TABLE>
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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 27, 1996 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 Accounting
G. M. McGrath Officer)
/s/ V. C. Benda President and Chief
- ------------------------ Operating Officer
V. C. Benda*
September 27, 1996
/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*
</TABLE>
*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.
/s/ F. W. Lang
------------------------
F. W. Lang, Chairman
20
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EXHIBIT INDEX
Exhibit Number Page No.*
- -------------- ---------
4-d Second Amendment to Rights Agreement
11 Calculations of Earnings Per Share.
13 1996 Annual Report to Shareholders.
21 Subsidiaries of Registrant.
23 Independent Auditors' Consent.
24 Powers of Attorney.
27 Financial Data Schedule
- ----------------------------
*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 16-17 of this Form 10-K.
21
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EXHIBIT 4-d
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9/23/96
SECOND AMENDMENT TO RIGHTS AGREEMENT
This Second Amendment to Rights Agreement dated as of April 30, 1996 by and
between Analysts International Corporation, a Minnesota corporation (the
"Company") and Norwest Bank Minnesota, National Association (the "Rights
Agent").
The Company and the Rights Agent entered into that certain Rights Agreement
dated as of June 16, 1989 (the "Rights Agreement"), which Rights Agreement was
subsequently amended pursuant to action of the Company's Board of Directors on
April 26, 1990.
On April 29, 1996, the Board of Directors of the Company adopted further
amendments to the Rights Agreement and authorized the officers of the Company to
take such further action as they deem necessary to effect such amendments.
The Company has notified the Rights Agent of the amendments so adopted and has
certified through an appropriate officer that such amendments are in compliance
with Section 27 of the Rights Agreement.
Accordingly, and in consideration of the premises and the mutual agreements set
forth in the Rights Agreement, the parties amend the Rights Agreement as
follows:
1. Section 1, paragraph (a) is amended to read:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares then
outstanding, but shall not include the Company, any Subsidiary
(as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to
the terms of any such plan, or any Person who acquires Common
Shares from the Company in a transaction approved by the Board of
Directors. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common
Shares of the Company then outstanding; PROVIDED, HOWEVER, that
if a Person shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason of
share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of
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Directors of the Company determines in good faith that a Person
who would otherwise be an Acquiring Person, as defined pursuant
to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such
Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for
any purpose of this Agreement.
2. Section 1, paragraph (g) is amended to read:
(g) "Distribution Date" shall mean the earlier of (i) the Close
of Business on the tenth day after the Shares Acquisition Date or
(ii) the Close of Business on the tenth day (or such earlier date
as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the
date of the commencement of, or of the first public announcement
of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or entity holding
Common Shares for or pursuant to the terms of any such plan or
any Person acquiring shares from the Company in a transaction
approved by the Board of Directors) to commence, a tender or
exchange offer (within the meaning of Rule 14e-2(a) under the
Exchange Act), the consummation of which would result in
beneficial ownership by a Person of 15% or more of the then
outstanding Common Shares (including any such date which is after
the date of this Agreement and prior to the issuance of the
Rights).
3. Section 1, paragraph (j) is deleted.
4. Section 7, paragraph (a) (i) is amended to read:
(i) the close of business on April 29, 2006 (the "Final
Expiration Date"),
5. Section 7, paragraph (b) is amended to read:
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $160, shall be subject to
adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States
of America in accordance with paragraph (c) below.
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6. Section 9, paragraph (a) is amended to read:
(a) The Company covenants and agrees that it will use its best
efforts to cause to be reserved and kept available out of its
authorized and unissued Common Shares or any reacquired Common
Shares, the number of Common Shares that, except as may otherwise
be permitted by Section 11 (a) (iv), will be sufficient to permit
the exercise in full of all outstanding Rights.
7. The introductory clause of Section 13, paragraph (a), which currently
reads "In the event, directly or indirectly," is amended to read:
In the event that, following the Shares Acquisition Date,
directly or indirectly,
8. Section 23, paragraph (c) is deleted.
9. Section 27 is amended to read:
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from
time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure
any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect
to the Rights which the Company may deem necessary or desirable,
any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent; PROVIDED, HOWEVER,
that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights
that are not or will not become void pursuant to the terms of
Section 11 (a) (ii), Section 13 or any other section hereof.
Without limiting the foregoing, the Company may at any time prior
to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1 (a) and
3 (a) hereof from 15% to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding
Common Shares then known by the Company to be beneficially owned
by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan) and (ii) 10%.
Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment unless
the Rights Agent shall
<PAGE>
have determined in good faith that such supplement or amendment
would adversely affect its interests under this Agreement. Prior
to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of
Common Shares.
The Company and the Rights Agent further agree to enter into a Restated Rights
Agreement as of April 30, 1996 incorporating the foregoing amendments.
Attest: ANALYSTS INTERNATIONAL CORPORATION
By /s/ THOMAS R. MAHLER By /s/ GERALD M. MCGRATH
------------------------------ -------------------------------
Thomas R. Mahler Gerald M. McGrath
Secretary Vice President - Finance
Attest: NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ SUZANNE M. SWITS By /s/ BEATRICE L. HUSTON
------------------------------ -------------------------------
Suzanne M. Swits Beatrice L. Huston
Assistant Secretary Vice President
<PAGE>
EXHIBIT 11
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 11
(Page 1 of 2)
CALCULATION OF PRIMARY EARNINGS PER SHARE
Year Ended June 30
--------------------------------------
1994 1995 1996
---- ---- ----
Net earnings $7,951,000 $11,256,000 $12,418,000
---------- ----------- -----------
---------- ----------- -----------
Weighted average number of
common shares outstanding 7,097,000 7,193,000 7,284,000
Dilutive effect of stock
options outstanding after
application of treasury 115,000 81,000 123,000
stock method ------- ------- -------
7,212,000 7,274,000 7,407,000
--------- --------- ---------
--------- --------- ---------
Net earnings per common
and common equivalent
share, based upon weighted
average number of shares
outstanding $1.10 $1.55 $1.68
---- ---- ----
---- ---- ----
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 11
(Page 2 of 2)
CALCULATION OF FULLY DILUTED EARNINGS PER SHARE
Year Ended June 30
----------------------------------------
1994 1995 1996
---- ---- ----
Net earnings $7,951,000 $11,256,000 $12,418,000
--------- ---------- ----------
Weighted average number of
common shares outstanding 7,097,000 7,193,000 7,284,000
Dilutive effect of stock
options outstanding after
application of treasury
stock method 122,000 97,000 133,000
------- ------ -------
7,219,000 7,290,000 7,417,000
--------- --------- ---------
--------- --------- ---------
Net earnings per common
and common equivalent
share, based upon weighted
average number of shares
outstanding $1.10 $1.54 $1.67
---- ---- ----
---- ---- ----
No significant variation in primary versus fully diluted earnings per share
existed for the years 1994-1996.
<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) 577-3569
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
AIC IBM PROJECT SUPPORT OFFICE (POST)
600 N Westshore Boulevard, Suite 304
Tampa, Florida 33609-1145
(813) 281-0458
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
(561) 241-5912
CHICAGO
1101 Perimeter Drive, Suite 500
Schaumburg, Illinois 60173-5060
(847) 619-4673
CINCINNATI/DAYTON
Governor's Pointe
4770 Duke Drive, Suite 207
Mason, Ohio 45040-9374
(513) 398-7811
CLEVELAND
Corporate Plaza I, Suite 350
6450 Rockside Woods Boulevard, South
Cleveland, Ohio 44131-2230
(216) 524-8990
<PAGE>
COLUMBUS
471 E Broad Street, Suite 2001
Columbus, Ohio 43215-3861
(614) 224-6790
DALLAS
3030 LBJ Freeway, Suite 820, LB52
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
Broadway Summit
3101 Broadway, Suite 101
Kansas City, Missouri 64111-2416
(816) 531-5050
LEXINGTON
2365 Harrodsburg Road, Suite B450
Lexington, Kentucky 40504-3342
(606) 223-0001
LOS ANGELES
7700 Irvine Center Drive, Suite 280
Irvine, California 92618-2924
(714) 450-8930
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
Gateway Centre Park, Suite 600
2700 Gateway Centre Boulevard,
Morrisville, North Carolina 27560-9137
(919) 460-6141
ROCHESTER, MINNESOTA
1530 Greenview Drive SW, Suite 205
Rochester, Minnesota 55902-1080
(507) 280-6663
ROCHESTER, NEW YORK
16 W Main Street, Suite 200
Rochester, New York 14614-1601
(716) 325-6640
<PAGE>
ST. LOUIS
600 Emerson Road, Suite 200
St. Louis, Missouri 63141-6708
(314) 997-1746
SAN FRANCISCO-EAST BAY
1850 Gateway Boulevard, Suite 120
Concord, California 94520-3299
(510) 687-5522
SAN JOSE
151 Martinvale Lane
San Jose, California 95119-1319
(408) 629-9300
SEATTLE
10655 NE 4th Street, Suite 804
Bellevue, Washington 98004-5022
(206) 454-2500
TAMPA
600 N Westshore Boulevard, Suite 304
Tampa, Florida 33609-1145
(813) 281-0458
TULSA
Corporate Place, Suite 1100
5800 E Skelly Drive
Tulsa, Oklahoma 74135-6448
(918) 663-0030
FIELD OFFICES
Akron/Canton, Ohio (330) 644-1166
Boston, Massachusetts (617) 229-5840
Boulder, Colorado (303) 442-7338
Charlotte, North Carolina (704) 594-6087
Danbury, Connecticut (203) 825-3940
Des Moines, Iowa (515) 221-9822
Miami, Florida (800) 597-5912
Portland, Oregon (503) 292-5161
Philadelphia, Pennsylvania (610) 941-2979
Sacramento, California (916) 565-7458
San Francisco, California (415) 352-0760
Toronto, Ontario, Canada (416) 322-3822
Washington, D.C. (703) 827-4107
AiC Analysts Limited
Cambridge, England (44) 1223 500055
<PAGE>
Contains 50% total recycled materials; 50% pre-consumer.
<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)
Year Ended June 30 % Increase
1996 1995 (Decrease)
---- ---- ----------
Revenues $ 329,544 $218,426 50.9
Income before income taxes 20,739 18,530 11.9
Net income 12,418 11,256 10.3
Per share of common stock:
Net income $ 1.68 $ 1.55 8.4
Shareholders' equity 7.33 6.22 17.8
Dividends declared .60 .52 15.4
Average common and common
equivalent shares outstanding 7,407,000 7,274,000 1.8
Number of personnel 3,770 3,170 18.9
Return on equity 25.1% 27.6% (9.1)
Current ratio 3.18 3.33 (4.5)
Working capital $ 47,348 $ 39,767 19.1
Long-term debt $ 0 $ 0 -
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
QUARTERLY REVENUES AND INCOME
(Dollars in thousands except per share amounts)
First Second Third Fourth
Fiscal 1996 Quarter Quarter Quarter Quarter Annual
------- ------- ------- ------- --------
Revenues $73,071 $78,786 $85,976 $91,711 $329,544
Income before income taxes 4,644 4,764 5,564 5,767 20,739
Income taxes 1,835 1,882 2,226 2,378 8,321
Net income 2,809 2,882 3,338 3,389 12,418
Net income per share .38 .39 .45 .46 1.68
Fiscal 1995
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
<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, 1996, 1995, and 1994.
- --------------------------------------------------------------------------------
Percent of Revenues
-----------------------------------
Year Ended June 30, 1996 1995 1994
---- ---- ----
Revenues 100.0% 100.0% 100.0%
Salaries, contracted services and
direct charges 76.6 71.3 71.2
Selling, administrative and other
operating costs 17.4 20.6 21.7
Non-operating income 0.3 0.4 0.1
---------------------------------------------------------------------------
Income before income taxes 6.3 8.5 7.2
Income taxes 2.5 3.3 2.7
--------------------------------------------------------------------------
Net income 3.8% 5.2% 4.5%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Revenues increased approximately $111 million, or 50.9%, in fiscal 1996 over
fiscal 1995. Revenues from outsourcing contracts with US West and IBM, which
began in June and August of 1995, respectively, accounted for slightly over
one-half of the fiscal 1996 increase. Excluding revenues from these two
sources, the Company's 1996 revenues were 22.4% greater than in 1995. Fiscal
1995 revenues, which did not include revenues from these two outsourcing
contracts, were 24.1% greater than fiscal 1994 revenues. All of these
increases resulted primarily from increases in billable hours of service
rendered to clients. Rate increases have not contributed significantly to the
revenue increases over this time period 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 3,770 at June 30, 1996, compared to 3,170 at June 30, 1995
and 2,600 at June 30, 1994; substantially all of the increases consist of
billable technical staff.
<PAGE>
Salaries, contracted services and direct charges, which represent primarily the
Company's direct labor costs, were 76.6% of revenues in fiscal 1996 compared to
71.3% of revenues in fiscal 1995. The increase in this expense category as a
percentage of revenues is a consequence of the U S West and IBM outsourcing
contracts. The Company uses subcontractors to augment its capacity as needed to
perform its obligations under these two contracts. The fees which it pays to
these subcontractors are higher per hour than the labor costs for its own
employees. Excluding both revenues and labor costs associated with the U S West
and IBM outsourcing contracts, this category of expense was 71.9% of revenues,
compared to 71.3% of fiscal 1995 revenues and 71.2% of fiscal 1994 revenues.
The Company's efforts to control these costs involve 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. While the Company has taken steps to control this category of
expense, there can be no assurance the Company will be able to maintain gross
margins at the level experienced in fiscal 1996 or to reduce labor costs to the
levels experienced in fiscal 1995 and 1994.
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 17.4% in fiscal 1996,
20.6% in 1995 and 21.7% in 1994. Excluding the revenues associated with the U S
West and IBM outsourcing contracts, this percentage would have been 21.4% for
fiscal 1996. While the Company 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, 1996 was $47.3 million, up 18.8% from the $39.8
million at June 30, 1995, which was up 26.4% from the $31.5 million at June 30,
1994. This includes cash and cash equivalents of $17.0 million at June 30, 1996
compared to $12.6 million at June 30, 1995 and $10.7 million a year earlier and
accounts receivable of $49.5 million at June 30, 1996 compared to $41.7 million
at June 30, 1995 and $28.3 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 major
customers are not expected to burden working capital, even though the ratio of
current assets to current liabilities has declined as a consequence of the
Company's use of subcontractors to perform substantial amounts of the work,
<PAGE>
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. Also,
in fiscal 1996 the Company enlarged certain branch facilities and remodeled the
Corporate facility. For fiscal 1996, capital expenditures, primarily for
computer equipment, furniture and leasehold improvements, totalled $2,932,000.
Capital expenditures for fiscal years 1995 and 1994 were $1,930,000 and
$1,294,000, respectively. All of these capital expenditures were funded
through working capital. Fiscal 1997 capital spending is expected to be similar
to fiscal 1996.
During fiscal 1996, the Company increased its regular quarterly dividends to
$.15 per share, up from $.13 declared during fiscal 1995 and the $.12 declared
during fiscal 1994. 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 will adopt Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and No. 123, "Accounting for Stock-Based Compensation," in the
first quarter of 1997. The adoption of these standards will not have a
significant effect on the Company's financial position and operating results.
The Company believes internally generated funds will be sufficient to meet the
cash requirements of its business for fiscal 1997.
<PAGE>
CONSOLIDATED BALANCE SHEETS
ANALYSTS INTERNATIONAL CORPORATION
June 30
--------------------------
(Dollars in thousands except per share amount) 1996 1995
---------------------------------------------- ---- ----
ASSETS
Current assets:
Cash and cash equivalents (Note A) $ 17,018 $ 12,615
Accounts receivable, less allowance for
doubtful accounts of $500 and $550,
respectively 49,494 41,706
Prepaid expenses and other current
assets (Note F) 2,567 2,493
------- -------
Total current assets 69,079 56,814
Property and equipment (Notes A and B) 5,715 5,020
Other assets (Notes C and F) 6,651 5,699
------- -------
$ 81,445 $ 67,533
------- -------
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,049 $ 7,241
Dividend payable 1,099 943
Salaries and vacations 7,524 6,653
Property and payroll taxes 222 114
Other, primarily self-insured health
care reserves 1,455 1,506
Income taxes payable 382 590
------- -------
Total current liabilities 21,731 17,047
Long-term liabilities (Note C) 5,996 5,352
Commitments (Note G) -- --
Shareholders' equity (Notes D, E and H):
Common stock, par value $.10 a share;
authorized 20,000,000 shares; issued and
outstanding 7,324,675 and 7,257,776 shares,
respectively 733 726
Additional capital 11,488 10,950
Retained earnings 41,497 33,458
------- -------
Total shareholders' equity 53,718 45,134
------- -------
$ 81,445 $ 67,533
------- -------
------- -------
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) 1996 1995 1994
- ---------------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Revenues $ 329,544 $ 218,426 $ 175,982
Expenses:
Salaries, contracted services and direct charges 252,518 155,743 125,285
Selling, administrative and other operating costs 57,314 44,913 38,163
---------- ---------- ----------
309,832 200,656 163,448
---------- ---------- ----------
Operating income 19,712 17,770 12,534
Non-operating income 1,027 760 241
---------- ---------- ----------
Income before income taxes 20,739 18,530 12,775
Income taxes (Note F) 8,321 7,274 4,824
---------- ---------- ----------
Net income $ 12,418 $ 11,256 $ 7,951
---------- ---------- ----------
---------- ---------- ----------
Net income per common and common
equivalent share (Note A) $ 1.68 $ 1.55 $ 1.10
---------- ---------- ----------
---------- ---------- ----------
Average common and common equivalent shares
outstanding 7,407,000 7,274,000 7,212,000
---------- ---------- ----------
---------- ---------- ----------
See notes to consolidated financial statements.
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
Year Ended June 30
-------------------------------------
(In thousands) 1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $12,418 $11,256 $7,951
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,191 1,814 1,660
Loss on disposal of assets 25 5 61
Increase in deferred income tax benefit (469) (445) (467)
Increase in accounts receivable (7,788) (13,413) (5,107)
Decrease (increase) in prepaid expenses 21 (31) (147)
Increase in accounts payable 3,808 5,550 21
Increase in salaries and vacations 871 1,351 756
Increase in other accrued expenses 57 111 222
(Decrease) increase in income taxes payable (208) 100 (219)
Increase in long-term liabilities 644 559 477
------ ------ ------
Net cash provided by operating activities 11,570 6,857 5,208
Cash flows from investing activities:
Property and equipment additions (2,932) (1,930) (1,294)
Increase in annuities and cash surrender values (578) (411) (288)
Proceeds from property and equipment sales 21 3 65
------ ------ ------
Net cash used in investing activities (3,489) (2,338) (1,517)
Cash flows from financing activities:
Cash dividends (4,223) (3,668) (3,265)
Proceeds from exercise of stock options 545 1,064 360
------ ------ ------
Net cash used in financing activities (3,678) (2,604) (2,905)
------ ------ ------
Net increase in cash and equivalents 4,403 1,915 786
Cash and equivalents at beginning of year 12,615 10,700 9,914
------ ------ ------
Cash and equivalents at end of year $17,018 $12,615 $10,700
------ ------ ------
------ ------ ------
Supplemental cash flow information:
Cash paid during the year for:
Income taxes $ 8,998 $7,619 $5,509
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, 1993 $ 706 $ 9,546 $ 21,421
Common stock issued - 57,925 shares
upon exercise of stock options 6 354
Cash dividends ($.48 per share) (3,413)
Net income 7,951
----- ---------- ---------
Balances at June 30, 1994 712 9,900 25,959
Common stock issued - 139,255 shares
upon exercise of stock options 14 1,050
Cash dividends ($.52 per share) (3,757)
Net income 11,256
----- ---------- ---------
Balances at June 30, 1995 726 10,950 33,458
Common stock issued - 66,899 shares
upon exercise of stock options 7 538
Cash dividends ($.60 per share) (4,379)
Net income 12,418
----- ---------- ---------
Balances at June 30, 1996 $ 733 $ 11,488 $ 41,497
----- ---------- ---------
----- ---------- ---------
</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 without collateral to customers, a
significant portion of whom are engaged in the electronics and
telecommunications industries. One customer and their various divisions and
operating units accounted for approximately 18%, 20% and 29% of revenues in
fiscal 1996, 1995 and 1994, respectively. Another customer accounted for 23%,
6% and 4% of revenues in fiscal 1996, 1995 and 1994, 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, 1996, there were approximately 8,564,000 shares
reserved for issuance under the stock option plans and the shareholders' rights
plan. (See also Notes D, E and H.)
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions affecting the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
FASB pronouncement - In April 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".
The Company intends to adopt this standard in fiscal year 1997 and does not
expect it to have a material impact on the Company's financial position or
results of operations.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
B. PROPERTY AND EQUIPMENT
June 30
----------------------
(In thousands) 1996 1995
---- ----
Cost:
Land $ 74 $ 74
Building and improvements 1,773 1,447
Office furniture & equipment 13,709 11,436
------ ------
Total 15,556 12,957
Accumulated depreciation (9,841) (7,937)
------ ------
$ 5,715 $ 5,020
------ ------
------ ------
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, 1996 and
1995 is $5,996,000 and $5,278,000 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, 1996
and 1995 is $4,550,000 and $3,972,000, respectively, representing the carrying
value of annuities, which approximates market value, and insurance cash value.
Deferred compensation expense for the fiscal years 1996, 1995 and 1994 was
approximately $718,000, $708,000 and $626,000 respectively.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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, 1996, there were options for 225,575 shares
available to be granted under the stock option plan. Option information for the
three years ended June 30, 1996 is as follows:
Number
of Shares Price Range
----------------- -----------------------
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 (148,279) 7.33 - 16.00
----------------- -----------------------
Outstanding at June 30, 1995 319,379 7.33 - 27.00
Granted 168,425 28.50 - 43.00
Expired (2,000) 19.25
Exercised (91,494) 7.33 - 25.94
----------------- -----------------------
Outstanding at June 30, 1996 394,310 $16.00 - 43.00
----------------- -----------------------
----------------- -----------------------
Exercisable at June 30, 1996 80,492 $16.00 - 27.00
----------------- -----------------------
----------------- -----------------------
The options outstanding at June 30, 1996 expire in the years ending June 30 as
follows: none in 1997, 106,875 in 1998, none in 1999, 119,010 in 2000 and
168,425 in 2001.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". The new standard defines a fair value method of accounting for
stock-based employee compensation plans. Under this method, compensation cost
is measured based on the fair value of the stock award when granted and is
recognized as an expense over the service period, which is usually the vesting
period. This standard will be effective for the Company beginning in fiscal
1997 and requires measurement of awards made beginning in fiscal 1996.
The new standard permits companies to continue to account for equity
transactions with employees under existing accounting rules, but requires
disclosure in a note to the financial statements of the pro forma net income and
earnings per share as if the company had applied the new method of accounting.
The Company intends to implement these disclosure requirements beginning in
fiscal year 1997. Adoption of the new standard will not impact reported net
income or cash flows.
<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.
On April 29, 1996 the Board of Directors amended the plan. The rights, which
expire on April 29, 2006, 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 $160.00, subject to certain adjustments.
The rights will become exercisable after a person or group acquires beneficial
ownership of 15 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 15 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 15 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 15 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:
Year Ended June 30
------------------------------
(IN THOUSANDS)
1996 1995 1994
---- ---- ----
Currently payable:
Federal $7,399 $6,477 $4,456
State 1,391 1,242 835
----- ----- -----
8,790 7,719 5,291
Deferred:
Federal (408) (377) (415)
State (61) (68) (52)
----- ----- -----
(469) (445) (467)
----- ----- -----
Total $8,321 $7,274 $4,824
----- ----- -----
----- ----- -----
Net deferred tax assets are comprised of the following:
June 30
----------------------
(In thousands) 1996 1995
---- ----
Deferred compensation $2,406 $2,072
Accrued vacation and compensatory time 1,095 939
Self-insured health care reserves 584 591
Allowance for doubtful accounts 201 216
Other 221 248
------ ------
Deferred tax assets 4,507 4,066
Depreciation (304) (374)
Other (163) (121)
------ ------
Deferred tax liabilities (467) (495)
------ ------
Net deferred tax assets $4,040 $3,571
------ ------
------ ------
Whereof:
Current $1,939 $1,844
Noncurrent 2,101 1,727
------ ------
$4,040 $3,571
------ ------
------ ------
<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:
Year Ended June 30
-----------------------------
1996 1995 1994
---- ---- ----
Statutory federal income tax rates 35.0% 35.0% 35.0%
State and local taxes,
net of federal benefit 4.2 4.2 4.2
Other 0.9 0.1 (1.4)
----- ----- -----
Effective tax rates 40.1% 39.3% 37.8%
----- ----- -----
----- ----- -----
No legislation was enacted during fiscal year 1996 affecting the corporate rate.
Therefore, no related adjustment was made to the deferred income tax accounts
during 1996. 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.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
G. Commitments
At June 30, 1996 aggregate net minimum rental commitments under noncancelable
operating leases having an initial or remaining term of more than one year are
payable as follows:
(In thousands)
Year ending June 30, 1997 $ 3,476
1998 3,149
1999 2,932
2000 2,673
2001 1,830
Later 1,271
------
Total minimum obligation $15,331
------
------
Rent expense, primarily for office facilities, for the years ended June 30,
1996, 1995 and 1994 was $2,841,000, $2,167,000 and $2,132,000, 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 1996, 1995 and 1994 amounted to approximately $611,000, $581,000 and
$530,000, respectively.
H. SUBSEQUENT EVENTS
On July 1, 1996, the Company acquired specific assets and assumed certain
liabilities of DPI, Inc. and DPI Services, Inc., a wholly owned subsidiary of
DPI, Inc., primarily engaged in the business of providing software services in
the San Jose, California market. This business had revenues of approximately
$11 million in calendar 1995. The initial amount paid in connection with the
purchase was approximately $5.6 million which was paid with internal funds.
This acquisition will be accounted for by the purchase method of accounting.
Accordingly, the assets acquired, including primarily customer-based
intangibles, accounts receivable and property and equipment, will be recorded at
their estimated fair values as of the date of acquisition. The excess of the
purchase price over the estimated fair value of the assets acquired will be
recorded as goodwill.
At its August 15, 1996 meeting, the Company's Board of Directors declared a
two-for-one stock split to be effected in the form of a 100 percent stock
dividend. The additional shares will be distributed on September 30, 1996 to
shareholders of record on September 9, 1996. Share and per share information
presented has not been adjusted to reflect this stock split.
<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, 1996
and 1995 and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended June 30, 1996.
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 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, 1996
and 1995, and the results of their operations and their cash flows for each of
the three years in the period ended June 30, 1996, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
August 15, 1996
<PAGE>
FIVE YEAR FINANCIAL SUMMARY
ANALYSTS INTERNATIONAL CORPORATION
<TABLE>
<CAPTION>
(Dollars in thousands except Fiscal Year
per share amounts) 1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $329,544 $218,426 $175,982 $159,703 $129,558
Salaries, contracted services
and direct charges 252,518 155,743 125,285 112,644 91,255
Non-operating income 1,027 760 241 462 463
Income before income taxes 20,739 18,530 12,775 13,501 8,684
Income taxes 8,321 7,274 4,824 5,235 3,310
- -------------------------------------------------------------------------------------------------------------
Net income 12,418 11,256 7,951 8,266 5,374
Total assets 81,445 67,533 51,210 44,907 38,091
Long-term liabilities 5,996 5,352 4,793 4,316 3,654
Shareholders' equity 53,718 45,134 36,571 31,673 25,796
Per share data:
Net income 1.68 1.55 1.10 1.15 .76
Cash dividends .60 .52 .48 .40 .37
Shareholders' equity 7.33 6.22 5.14 4.48 3.69
Average common and
common equivalent shares
outstanding 7,407,000 7,274,000 7,212,000 7,170,000 7,066,000
Number of personnel 3,770 3,170 2,600 2,270 2,070
---------------------------------------------------------------------
---------------------------------------------------------------------
</TABLE>
<PAGE>
STOCK DATA
<TABLE>
<CAPTION>
Trailing
Market Range Dividend 12-Month
FISCAL 1996 High Low Close Declared P/E Ratio
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fourth Quarter $43 3/4 $33 $42 $.15 25
Third Quarter 37 3/4 27 1/4 34 .15 20
Second Quarter 33 29 30 .15 19
First Quarter 33 25 1/2 32 .15 20
FISCAL 1995
- ------------------------------------------------------------------------------------------------------------
Fourth Quarter $27 3/4 $22 1/2 $26 $.13 17
Third Quarter 23 1/4 19 3/4 23 1/4 .13 17
Second Quarter 20 3/4 17 20 1/2 .13 16
First Quarter 17 1/2 14 1/2 17 1/2 .13 15
</TABLE>
Common shares are traded in the Nasdaq National Market under the symbol ANLY.
As of August 15, 1996, there were approximately 1,400 shareholders of record
and approximately 7,400 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.
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 $.15 a share in fiscal 1996 and $.13 a share in
fiscal 1995.
On August 15, 1996, the Board of Directors declared a two-for-one stock split
to be effected in the form of a 100 percent stock dividend and increased the
quarterly cash dividend to $.09 a share. The cash dividend would be the
equivalent of $18 a share had the stock not been split.
<PAGE>
BOARD OF DIRECTORS
Frederick W. Lang
Chairman and Chief
Executive Officer
Victor C. Benda
President and Chief
Operating Officer
Willis K. Drake
Retired Chairman of the Board
Data Card Corporation
Margaret A. Loftus
Principal, Loftus Brown-Wescott, Inc.
Edward M. Mahoney
Retired Chairman and
Chief Executive Officer
Fortis Investors, Inc.
and Fortis Advisers, Inc.
Robb L. Prince
Retired Vice President and Treasurer
Josten's, Inc.
DIRECTOR EMERITUS
James E. Thornton
Retired Chairman of the Board
Network Systems Corporation
OFFICERS
Frederick W. Lang
Chairman and Chief
Executive Officer
Victor C. Benda
President and Chief
Operating Officer
Sarah P. Spiess
Senior Vice President
Vice President, Southern Region
Gerald M. McGrath
Vice President, Treasurer
and Chief Financial Officer
Thomas R. Mahler
Secretary and General Counsel
Richard J. Chiappetta
Vice President, Central Region
Philip P. Colligan
Vice President, Eastern Region
Robert J. Pugh
Vice President, Midwest Region
Roman E. Rowan
Vice President, Western Region
Richard A. Ferrera
Vice President, Program Management
George R. Zak
Vice President, Investor Relations
Marti R. Charpentier
Controller and Assistant Treasurer
Colleen M. Davenport
Associate General Counsel and
Assistant Secretary
<PAGE>
10-K AVAILABLE
A copy of the Company's 1996
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, 1996
February 14, 1997
May 15, 1997
August 15, 1997
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Minneapolis, Minnesota
ANNUAL MEETING
The 1996 Annual Meeting
of Shareholders will be
held on October 17, 1996
at 3 p.m. at the
Edina Country Club,
5100 Wooddale Avenue,
Edina, Minnesota.
QUARTERLY REPORTS
Analysts International Corporation sends quarterly earnings releases directly to
shareholders, instead of traditional printed quarterly reports. Many
companies now follow this approach, which gives shareholders pertinent
information faster, at lower cost to the Company.
WORLD WIDE WEB ADDRESS
http://www.analysts.com
<PAGE>
EXHIBIT 21
<PAGE>
ANALYSTS INTERNATIONAL CORPORATION
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
YEAR ENDED JUNE 30, 1996
State or Percentage
Jurisdiction of Voting
of Securities
Subsidiaries Incorporation Owned
- ------------- ------------- ----------
AiC Analysts Limited United 100%
Kingdom
<PAGE>
EXHIBIT 23
<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 15, 1996, appearing and incorporated by
reference in this Annual Report on Form 10-K of Analysts International
Corporation for the year ended June 30, 1996.
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
September 27, 1996
<PAGE>
EXHIBIT 24
<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, 1996 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 23rd day of
September, 1996.
/s/ Willis K. Drake
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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, 1996 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 23rd day of
September, 1996.
/s/ Margaret Loftus
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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, 1996 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 23rd day of
September, 1996.
/s/ Edward M. Mahoney
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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, 1996 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 23rd day of
September, 1996.
/s/ Robb Prince
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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, 1996 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 23rd day of
September, 1996.
/s/ Frederick W. Lang
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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, 1996 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 23rd day of
September, 1996.
/s/ Victor C. Benda
---------------------------------------
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
On the 23rd day of September, 1996, 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
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 17,018
<SECURITIES> 0
<RECEIVABLES> 49,994
<ALLOWANCES> 500
<INVENTORY> 0
<CURRENT-ASSETS> 69,079
<PP&E> 15,556
<DEPRECIATION> 9,841
<TOTAL-ASSETS> 81,445
<CURRENT-LIABILITIES> 21,731
<BONDS> 5,996
0
0
<COMMON> 733
<OTHER-SE> 52,985
<TOTAL-LIABILITY-AND-EQUITY> 81,445
<SALES> 329,544
<TOTAL-REVENUES> 329,544
<CGS> 252,518
<TOTAL-COSTS> 252,518
<OTHER-EXPENSES> 57,314
<LOSS-PROVISION> (50)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,739
<INCOME-TAX> 8,321
<INCOME-CONTINUING> 12,418
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,418
<EPS-PRIMARY> 1.68
<EPS-DILUTED> 1.68
</TABLE>
