UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
__X__ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
_____ Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number 0-13111
ANALYTICAL SURVEYS, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-0846389
(State of incorporation) (IRS Employer Identification No.)
1935 Jamboree Drive
Colorado Springs, Colorado 80920
(Address of principal executive offices) (Zip Code)
(719) 593-0093
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past (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 ninety (90)
days.
Yes __X__ No_____
The number of shares of common stock outstanding as of
April 30, 1996 was 3,213,124.
<PAGE>
Part I Item 1.
<TABLE>
<CAPTION>
ANALYTICAL SURVEYS, INC.
BALANCE SHEETS
(Unaudited)
March 31, Sept. 30,
1996 1995
_________ _________
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $ 414,264 $ 665,274
Accounts receivable, net of $20,000
allowance for doubtful accounts 3,741,007 2,925,094
Unbilled revenues 7,292,662 4,705,020
Prepaid expenses 569,109 209,343
Deferred tax assets 42,927 49,713
__________ __________
Total current assets 12,059,968 8,554,444
__________ __________
PROPERTY AND EQUIPMENT, at cost
Equipment 6,134,055 5,656,521
Furniture and fixtures 848,165 735,313
Leasehold improvements 152,858 133,711
__________ __________
7,135,078 6,525,545
__________ __________
Less Accumulated depreciation and amortization (5,498,136) (5,046,065)
___________ __________
1,636,943 1,479,480
Goodwill, less accumulated amortization 3,042,029 13,751
__________ ___________
TOTAL ASSETS $ 16,738,940 $10,047,675
========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYTICAL SURVEYS, INC.
BALANCE SHEETS
(Unaudited)
March 31, Sept. 30,
1996 1995
_________ _________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Notes payable to bank (Note 2) $ 175,000 $ --
Current maturities of long-term debt 751,405 417,100
Billings in excess of costs 701,472 176,934
Accounts payable and accrued expenses 1,999,084 1,560,227
Accrued payroll and benefits 800,026 661,951
__________ __________
Total current liabilities 4,426,987 2,816,212
Deferred income tax 49,989 113,290
Long-term debt, less current maturities 3,270,598 408,078
Deferred compensation 59,582 55,407
__________ __________
Total liabilities 7,807,156 3,392,987
__________ __________
STOCKHOLDERS' EQUITY
Preferred stock-authorized 2,500,000 shares
of no par value; none issued and outstanding
Common stock-authorized 100,000,000 shares
of no par value; issued and outstanding
3,167,599 shares at March 31, 1996 and
2,854,849 shares at September 30, 1995 5,028,469 3,461,100
Treasury stock - 23,500 shares, at cost (124,844) (124,844)
Retained earnings 4,028,159 3,318,432
__________ __________
Total stockholders' equity 8,931,784 6,654,688
__________ __________
TOTAL LIABILITIES AND EQUITY $ 16,738,940 $10,047,675
========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYTICAL SURVEYS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
March 31, March 31,
1996 1995 1996 1995
_________ _________ _________ _________
<S> <C> <C> <C> <C>
SALES OF SERVICES $9,333,147 $6,192,588 $5,684,513 $3,275,927
_________ _________ _________ _________
COSTS AND EXPENSES
Salaries, wages and benefits 4,330,183 2,449,860 2,883,606 1,279,980
Subcontractor costs 1,681,637 1,554,310 747,012 798,081
General and administrative 1,541,791 1,101,380 967,428 554,682
Depreciation and amortization 510,973 387,685 293,851 199,486
_________ _________ _________ _________
8,064,584 5,493,235 4,891,897 2,832,229
_________ _________ _________ _________
EARNINGS FROM OPERATIONS 1,268,563 699,353 792,616 443,698
_________ _________ _________ _________
OTHER INCOME (EXPENSE)
Interest (125,905) (74,225) (97,634) (40,182)
Miscellaneous Income 2,569 47 2,527 26
_________ _________ _________ _________
(123,336) (74,179) (95,107) (40,156)
_________ _________ _________ _________
EARNINGS BEFORE INCOME TAXES 1,145,227 625,175 697,509 403,541
INCOME TAX EXPENSE 435,500 238,000 263,000 152,000
_________ _________ _________ _________
NET EARNINGS $ 709,727 $ 387,175 $ 434,509 $ 251,541
========= ========= ========= =========
EARNINGS PER SHARE $ 0.22 $ 0.13 $ 0.13 $ 0.09
==== ==== ==== ====
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ANALYTICAL SURVEYS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended Six Months Ended
March 31, March 31,
1996 1995
_________ _________
<S> <C> <C>
CASH FLOWS PROVIDED (USED)
BY OPERATING ACTIVITIES $ 2,227 $ 77,445
__________ _________
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (225,104) (443,434)
Purchase of Intelligraphics (4,587,008)
__________ _________
Net cash used in investing activities (4,812,112) (443,434)
__________ _________
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) under notes payable 175,000 --
Proceeds from issuance of long-term debt 3,501,802 394,108
Principal payments of long-term debt (304,977) (341,679)
Proceeds from issuance of common stock 1,187,058 284,220
__________ _________
Net cash provided (used)
by financing activities 4,558,875 336,649
__________ _________
Net increase (decrease) in cash (251,010) (29,341)
Cash at beginning of period 665,274 552,232
__________ _________
Cash at end of period $ 414,264 $ 522,891
========== =========
Supplemental cash flow disclosures:
Interest paid $ 123,869 $ 72,896
========== =========
Income taxes paid $ 363,555 $ 554,200
========== =========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1996
Notes to Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
The accompanying interim financial statements have been prepared
by management in accordance with the accounting policies
described in the Company's annual report for the year ended
September 30, 1995. They have not been audited by independent
auditors.
The financial statements reflect all adjustments which are, in
the opinion of management, necessary to present fairly the
financial position of Analytical Surveys, Inc. at March 31, 1996
and its results of operations for the six and three months ended
March 31, 1996 and 1995, and its cash flows for the six months
ended March 31, 1996 and 1995. All such adjustments are of a
normal recurring nature.
The Statement of Cash Flows for the six months ended March 31,
1995 includes certain reclassifications to conform the
presentation to that used in the 1995 annual report and the
current period.
The computation of earnings per common share is based on the
weighted average number of shares outstanding plus common stock
equivalents as follows:
Six months ended March 31, 1996 3,222,800
Six months ended March 31, 1995 2,888,000
Three months ended March 31, 1996 3,341,600
Three months ended March 31, 1995 2,897,000
2. Notes Payable to Bank
Effective December 20, 1995, the Company renewed its line of
credit loan agreement with its existing bank for one year and
increased the maximum loan amount to $1,850,000. The interest
rate is 0.5 percent above the bank's published prime lending rate
and is variable with changes in that prime rate.
On December 22, 1995, the Company borrowed $3,430,000 from a bank
to fund substantially all of the cash portion of the purchase
price of the acquisition described in note 3 below. The debt is
to be repaid in monthly installments of $56,062 in the first year
increasing to $57,356 in the fourth year. A final payment of
$1,685,552 will be due at the end of the fourth year. Interest on
this term debt is 0.6 percent above the bank's published prime
lending rate and is variable with changes in that prime rate.
3. Acquisition
On December 22, 1995 the Company acquired substantially all of
the net operating assets of Intelligraphics Inc. of Waukesha,
Wisconsin. The business operates as a division of the Company
under the name of Intelligraphics International, a division of
Analytical Surveys, Inc., is in substantially the same line of
business as the Company and had sales of approximately $8,000,000
in calendar year 1995. Intelligraphics serves the utilities
market with emphasis on electric distribution and telephone data
conversion.
The acquisition was recorded using the purchase method of
accounting, and the financial statements include the operations
of Intelligraphics from the date of acquisition, December 22,
1995 through the end of the period.
The $4,558,875 consideration paid for the net assets acquired and
related acquisition costs consisted of cash in the amount of
$3,695,758 plus 230,000 shares of Analytical Surveys, Inc. no par
value common stock, which shares are subject to restrictions on
both transfer and voting rights for a period of two years. These
restricted shares were recorded at $3.875 per share reflecting
the effect of the restrictions on the fair market value of the
shares.
The acquisition included goodwill valued at $3,088,803 which will
be amortized over a 15 year life using the straight line method.
A portion of the consideration paid ($250,000 plus 70,000 of the
restricted shares) is being held in escrow awaiting the
satisfactory conclusion of certain pending matters.
4. Stock Options
The following table summarizes stock option transactions under
the Company's four non-qualified stock option plans:
Shares Average
under Option Price
option per share
Outstanding at September 30, 1995 711,275
Issued 4,000 $ 7.97
Exercised (106,250) 2.83
Canceled (8,625) 4.41
-------
Outstanding March 31, 1996 600,400
=======
At March 31, 1996:
Options Exercisable 356,900
=======
Available for Grant 203,975
=======
<PAGE>
ANALYTICAL SURVEYS, INC.
Quarterly Report on Form 10-QSB
March 31, 1996
Part I Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations:
Three Months Ended March 31, 1996
Sales for the three months ended March 31, 1996 were 73% greater
than sales for the same period one year ago. The primary reason
for this increase is the acquisition of the Intelligraphics
division in December 1995.
Costs and expenses for the three months ended March 31, 1996 also
increased 73% over the same period of the previous year, again
due primarily to the Intelligraphics acquisition. There were
changes in the mix of specific expense categories of the costs
and expenses group. Salaries and wages increased from 39% of
sales in 1995 to 51% of sales in 1996 due to the greater internal
labor component of utilities conversion work. At the same time
subcontractor costs decreased from 24% of sales in 1995 to 13% of
sales in 1996 due to the lesser subcontractor component of the
utilities work. These two categories taken together were 64% of
sales in both 1995 and 1996. Depreciation and amortization
includes approximately $52,000 in expense related to the
amortization of the Intelligraphics goodwill.
Interest expense increased 143% due to the term debt incurred as
part of the Intelligraphics acquisition.
Net income (all from continuing operations) for the three months
ended March 31, 1996 of was 73% higher than the same period of
the previous year due to the increased sales described above.
Earnings per share increased 44%, which was less than the
increase in net income due to the effect of shares issued in the
acquisition, shares issued for stock option exercises and the
effect of common stock equivalents on the average number of
shares outstanding.
Six Months Ended March 31, 1996
Net income (all from continuing operations) for the six months
ended March 31, 1996 increased 83% over the first half of 1995.
Increased production in the first quarter plus the effects of the
Intelligraphics acquisition caused sales to increase 51% and
earnings from operations to increase 81%. Salaries expense
increased 77% due to the acquisition. Subcontractor costs
increased only 8% due the lesser use of subcontractors in the
utilities conversion work. The 40% increase in general and
administrative expenses was primarily the result of the
acquisition, increased selling and marketing activity and
increased production. Interest expense was 70% more than the same
period of the previous year due to the term debt incurred as part
of the Intelligraphics acquisition. Earnings per share increased
69%, which was less than the increase in net income due to the
effect of shares issued in the acquisition, shares issued for
stock option exercises and the effect of common stock equivalents
on the average number of shares outstanding.
Cash flow provided by operations in the six months ended March
31, 1996 was $2,227 compared to $77,445 in the same six months of
the previous year. Cash flow from operations was reduced by a
$229,000 increase in prepaid income taxes offset by normal
variations in investment in unbilled revenues and accounts
receivable. The Company maintains an open line of credit to
finance the investment in unbilled revenue and accounts
receivable. The increase in current assets and current
liabilities is attributable to the acquisition.
Cash flow from investing activities includes the investment in
the net assets of the new Intelligraphics division plus equipment
acquisitions required by increased production at both locations.
Cash flow from financing activities consists of the borrowing of
cash and the issuance of shares to finance the acquisition of
Intelligraphics as well as financing of equipment using capital
leases, the scheduled repayment of debt and capitalized leases
and proceeds from the exercise of stock options by employees.
The Company's backlog of contracted work increased to $26,582,000
at March 31, 1996 up 94% from 1995 due to the acquisition of
Intelligraphics and the increased volume of new contracts from
both new and existing customers.
Liquidity and Capital Resources:
Management expects to meet long-term liquidity requirements
through cash flows generated by operations supplemented from time
to time by short term borrowings on a bank line of credit.
Routine capital expenditures will usually be financed with term
debt and/or capital leases. The Company is dependent, however,
upon its ability to successfully deliver acceptable products in
order to maintain adequate operating cash flows.
The Company has not committed to significant capital expenditures
at March 31, 1996.
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders
Three matters were voted upon at the Annual Meeting of
Shareholders on February 20, 1996:
(a) All nominees for director listed in the Company's proxy
statement were elected; there was no solicitation in opposition
to management's nominees. The following directors were re-elected
to serve for one year or until the next election of directors:
For Withheld
John A. Thorpe 2,634,589 8,788
Richard P. MacLeod 2,633,920 9,457
James T. Rothe 2,634,043 9,334
Sidney V. Corder 2,634,033 9,344
Robert H. Keeley 2,634,043 9,334
Willem H. J. Andersen 2,634,043 9,334
(b) The proposal to ratify the selection of KPMG Peat Marwick LLP
as the Company's independent accountants for the fiscal year
ending September 30, 1996 was passed:
For 2,600,597
Against 39,554
Abstain 3,226
(c) The proposal to ratify the Company's 1995 Non-Qualified Stock
Option Plan was passed:
For 2,465,868
Against 144,675
Abstain 32,834
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
7. Financial Data Schedule
(b) Reports on Form 8-K
One report on Form 8-K was filed during the three
months ended March 31, 1996. A report on Form 8-K was
filed January 8, 1996: Item 7. "Acquisition or
Disposition of Assets" reporting the acquisition of the
net assets of Intelligraphics, Inc. This report was
amended on February 15, 1996 to add audited financial
statements of Intelligraphics, Inc. and unaudited pro
forma financial information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Analytical Surveys, Inc.
(Registrant)
Date May 13, 1996 /s/ Sidney V. Corder
________________________
Sidney V, Corder, President
and Chief Executive Officer
Date May 13, 1996 /s/ Scott C. Benger
________________________
Scott C. Benger, Secretary/Treasurer
(principal financial officer and
principal accounting officer)
Date May 13, 1996 /s/ Brian J. Yates
________________________
Brian J. Yates, Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from SEC Form 10-QSB and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000753048
<NAME> ANALYTICAL SURVEYS INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 414264
<SECURITIES> 0
<RECEIVABLES> 11053669
<ALLOWANCES> 20000
<INVENTORY> 0
<CURRENT-ASSETS> 12059968
<PP&E> 7135078
<DEPRECIATION> 5498136
<TOTAL-ASSETS> 16738940
<CURRENT-LIABILITIES> 4426987
<BONDS> 0
<COMMON> 4903625
0
0
<OTHER-SE> 4028159
<TOTAL-LIABILITY-AND-EQUITY> 16738940
<SALES> 0
<TOTAL-REVENUES> 9333147
<CGS> 0
<TOTAL-COSTS> 8064584
<OTHER-EXPENSES> (2569)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125905
<INCOME-PRETAX> 1145227
<INCOME-TAX> 435500
<INCOME-CONTINUING> 709727
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<NET-INCOME> 709727
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
