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EXHIBIT 7.2
Analysts International Corporation
Pro Forma Condensed Combining Balance Sheet
As of December 31, 1999
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Analysts Sequoia Adjustments Combined
-------- ------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS
Cash $ 35,081 $ 117 $ (33,500) 1 $ 1,698
Accounts Receivable, net 87,295 11,378 98,673
Inventory 529 529
Prepaid expenses and other current assets 3,815 674 4,489
-------- -------- ----------- --------
126,191 12,698 (33,500) 105,389
Property and equipment, net 28,422 2,212 30,634
Intangible assets, net 6,699 20,303 18,300 2 45,591
289 3
Other assets 10,253 413 (413) 4 10,253
-------- -------- -------- --------
$171,565 $35,626 $ (15,324) $191,867
======== ======== ======== ========
LIABS & SHAREHOLDERS EQUITY
Accounts payable $ 30,520 $ 2,113 $ 289 3 $ 32,922
Dividends payable 2,258 2,258
Salaries and vacations 7,864 4,869 12,733
Other, primarily self-insurance health care reserves 3,325 3,325
Income tax payable - 1,380 1,380
-------- -------- -------- --------
Total Current Liabilities 43,967 8,362 289 52,618
Long-term debt 20,000 431 10,000 1 30,431
Other long-term liabilities 7,848 22 (19) 4 7,851
Minority interest 1,217 4 1,217
Shareholders' equity 99,750 26,811 (26,811) 4 99,750
-------- -------- -------- --------
Total $171,565 $35,626 $ (15,324) $191,867
======== ======== ======== ========
</TABLE>
See notes to pro forma condensed combining financial statements.
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Analysts International Corporation
Pro Forma Condensed Combining Statement of Operations
Fiscal Year Ended June 30, 1999
(Dollars in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Analysts Sequoia Adjustments Combined
---------------- --------------- ------------ ----------------
<S> <C> <C> <C> <C>
Sales:
Provided directly $ 480,790 $ 52,061 $ 532,851
Provided through sub-suppliers 139,366 139,366
---------------- --------------- ----------------
620,156 52,061 672,217
Expenses
Salaries, contracted services and direct charges 486,816 34,059 520,875
Selling, administrative and other operating costs 97,302 17,849 $ 457 6 115,608
---------------- --------------- ------------ ----------------
584,118 51,908 457 636,483
---------------- --------------- ------------ ----------------
Operating income 36,038 153 (457) 35,734
Non-operating income 1,408 - 1,408 7 -
Interest expense 178 12 1,522 7 1,712
---------------- --------------- ------------ ----------------
Income before income taxes & minority interest 37,268 141 (3,387) 34,022
Provision for income taxes 14,535 1,197 (2,123) 8 13,609
Minority interest in loss 296 5 296
---------------- --------------- ------------ ----------------
Net Income (Loss) $ 22,733 $ (1,056) $ (1,560) $ 20,117
================ =============== ============ ================
Per common share:
Net Income (basic) $ 1.01 $ 0.89
Net Income (diluted) $ 1.00 $ 0.88
Average common shares outstanding 22,524,000 22,524,000
Average common and common equivalent shares outstanding 22,732,000 22,732,000
</TABLE>
See notes to pro forma condensed combining financial statements.
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Analysts International Corporation
Pro Forma Condensed Combining Statement of Operations
Six Months Ended December 31, 1999
(Dollars in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Analysts Sequoia Adjustments Combined
--------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Sales:
Provided directly $ 216,633 $ 31,714 $ 248,347
Provided through sub-suppliers 71,281 71,281
--------------- --------------- -----------------
287,914 31,714 319,628
Expenses
Salaries, contracted services and direct charges 231,322 19,740 251,062
Selling, administrative and other operating costs 47,001 10,952 $ 193 6 58,146
--------------- --------------- --------------- -----------------
278,323 30,692 193 309,208
--------------- --------------- --------------- -----------------
Operating Income 9,591 1,022 (193) 10,420
Non-operating income 1,129 (921) 7 208
Interest expense 702 12 425 7 1,139
--------------- --------------- --------------- -----------------
Income before income taxes & minority interest 10,018 1,010 (1,539) 9,489
Provision for income taxes 3,908 837 (950) 8 3,795
Minority interest in income 295 5 295
--------------- --------------- --------------- -----------------
Net income $ 6,110 $ 173 (884) $ 5,399
=============== =============== =============== =================
Per common share:
Net Income (basic) $ 0.27 $ 0.24
Net Income (diluted) $ 0.27 $ 0.24
Average common shares outstanding 22,563,000 22,563,000
Average common and common equivalent shares outstanding 22,625,000 22,625,000
</TABLE>
See notes to pro forma condensed combining financial statements.
<PAGE>
Analysts International Corporation
Notes to Pro Forma Condensed Combining Financial Statements
1. Acquisition of Sequoia NET.com
On April 25, 2000, pursuant to a Stock Purchase Agreement dated April
12, 2000 (the "Agreement") among Analysts International Corporation (the
"Company") and Panurgy Corporation, the parent company of Sequoia NET.com
("Sequoia"), the Company purchased 80.1% of the outstanding Common Stock of
Sequoia (the "Acquisition"). The negotiated value for the purchase of the stock
of Sequoia was approximately $43.5 million. Such $43.5 million amount was paid
using funds from the Company's working capital and the Company's line of credit.
2. Pro forma adjustments
The accompanying pro forma financial statements are presented in
accordance with Article 11 of Regulation S-X.
The unaudited pro forma condensed combining balance sheet has been
prepared as if the Acquisition, which was accounted for as a purchase, was
completed as of December 31, 1999. The aggregate purchase price of $43.5
million, plus $289,000 of costs directly attributable to the completion of
the acquisition have been allocated to the assets and liabilities acquired.
The excess of the purchase price over the fair value of the tangible assets
acquired will be allocated to identifiable intangible assets including the
customer list, in-place workforce, software tools, and goodwill based on an
independent appraisal of the fair market value of those assets. The
intangible assets are expected to have economic lives ranging from 5 to 18
years.
To prepare the pro forma unaudited condensed combining statement of
operations, the Company's statement of operations for the year ended June 30,
1999 has been combined with the statement of operations of Sequoia, for
the year ended June 30, 1999. Also, the Company's statement of operations for
the six months ended December 31, 1999 has been combined with the statement of
operations of Sequoia, for the six months ended December 31, 1999. For
purposes of this combination, Sequoia's audited financial statements have
been adjusted to conform to the fiscal periods of Analysts International. This
method of combining the companies is for the presentation of unaudited condensed
combining financial statements only. Actual statements of operations of the
companies will be combined from the effective date of the Acquisition, with no
retroactive restatement.
The unaudited pro forma condensed combining financial statements should
be read in conjunction with the historical financial statements of the Company
and Sequoia.
The following pro forma adjustments have been made to the pro forma
condensed combining financial statements.
(1) Reflects cash used and debt incurred by the Company for the
Acquisition.
(2) Reflects the allocation of the excess of the purchase price
over tangible net assets to the intangible assets identified
in the purchase price allocation.
<PAGE>
(3) Reflects the accrual of costs directly attributable to the
completion of the acquisition.
(4) Reflects the application of purchase accounting including the
elimination of certain intercompany account balances,
elimination of Sequoia's shareholders' equity, and the
establishment of the minority Interest.
(5) Reflects the minority shareholders' interest in the earnings
of Sequoia.
(6) Reflects pro forma amortization of the purchased intangibles
of $3,000,000 for the year ended June 30, 1999 and $1,500,000
for the six months ended December 31, 1999 and the
elimination of the amortization included in Sequoia's
historical financial statements.
(7) Reflects the reduction of interest income as a result of the
use of excess cash for the acquisition, and an increase in
interest expense as a result of the increase in the line of
credit balance.
(8) Reflects the tax effect of the above adjustments plus a
reduction in Sequoia's historical effective rate due to the
fact the original goodwill resulting from the acquisition of
Sequoia by Panurgy was not deductible.
