11-K 1 form11_k.htm ANALYSTS INTERNATIONAL FORM 11K 12-31-2006 form11_k.htm




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 11-K

[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2006

OR

[   ] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from ___________ to ___________

Commission file number 0-4090



A.      Full title of the plan and the address of the plan, if different from that of the issuer named below:

Analysts International Corporation Savings and Investment Plan

B.      Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Analysts International Corporation
3601 West 76th Street
Minneapolis, MN 55435
(952) 835-5900



ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN

INDEX


   
Page
 
       
Report of Independent Registered Public Accounting Firm
   
1
 
         
Financial Statements – Years Ended December 31, 2006 and 2005:
       
         
Statements of Net Assets Available for Plan Benefits
   
2
 
         
Statements of Changes in Net Assets Available for Plan Benefits
   
3
 
         
Notes to Financial Statements
   
4-7
 
         
Supplemental Schedules Furnished Pursuant to the Requirements of Form 5500:
       
         
Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
   
8
 
         
Schedule H, Part IV, Line 4j - Schedule of Reportable Transactions for the Year Ended December 31, 2006
   
9
 
         
Signatures
   
10
 
         
Exhibit Index
   
11
 


2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Savings and Investment Plan Committee of
Analysts International Corporation
Minneapolis, Minnesota

We have audited the accompanying statements of net assets available for plan benefits of the Analysts International Corporation Savings and Investment Plan (the “Plan”) as of December 31, 2006 and 2005, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2006 and 2005, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of (1) assets (held at end of year) as of December 31, 2006, and (2) reportable transactions for the year ended December 31, 2006, are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan’s management.  Such schedules have been subjected to the auditing procedures applied in our audit of the basic 2006 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.


/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
June 28, 2007

3


ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS



   
December 31,
   
December 31,
 
   
2006
   
2005
 
             
Cash – Pending Account
Participant directed investments, stated at market value
  $
3,488
81,482,950
    $
963
77,867,091
 
(See Notes F and G)
               
                 
Non-participant directed investments, stated at market value
   
-
     
-
 
(See Note G)
               
                 
Net assets available for plan benefits
  $
81,486,438
    $
77,868,054
 


See notes to financial statements.

4


ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS



   
December 31,
   
December 31,
 
   
2006
   
2005
 
             
Net assets available for plan benefits, beginning of year
  $
77,868,054
    $
79,557,703
 
                 
Additions:
               
Investment income
   
4,425,775
     
2,094,105
 
Contributions by employer
   
343,538
     
262,601
 
Contributions by participants
   
6,604,689
     
6,209,284
 
Net appreciation/(depreciation) in market value of investments
   
3,730,429
      (82,134 )
     
15,104,431
     
8,483,856
 
Deductions:
               
Distributions to participants
   
11,486,022
     
10,173,479
 
Loan fees
   
25
     
26
 
     
11,486,047
     
10,173,505
 
                 
Net additions/(deductions)
   
3,618,384
      (1,689,649 )
                 
Net assets available for plan benefits, end of year
  $
81,486,438
    $
77,868,054
 


See notes to financial statements.

5


ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2006 AND 2005

The following description of the Analysts International Corporation (the “Company”) Savings and Investment Plan (the “Plan”) provides only general information.  Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.

A.       Summary of Significant Accounting Policies

Investments are valued by the trustee at fair market value quoted market values.  Promissory notes from participants are stated at the outstanding principal balance.

The financial statements have been prepared on the accrual basis of accounting.  Dividends are recorded on the ex-dividend date.  All security transactions are recorded on their trade date.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period.  Actual results could differ from those estimates.

The Plan invests in various securities including U.S. Government securities, mutual funds, and corporate stocks.  Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility.  Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the participants’ accounts and statements of net assets available for plan benefits.

B.       The Plan

The Plan became effective January 1, 1985 under Section 401(k) of the Internal Revenue Code for the purpose of providing retirement and other benefits to eligible participants.  An employee of the Company becomes eligible for the Plan upon commencement of active service.

The Plan is funded primarily by employee contributions.  Eligible employees may contribute up to 50% of their gross annual wages for pre-tax saving contributions, as defined in the Plan and subject to Internal Revenue Service (the “IRS”) limitations.  Participants may choose to increase their contributions automatically at pre-designated intervals.   Highly-compensated employees’ contributions are limited based on discrimination testing performed.  In addition, the Plan allows rollover contributions from certain qualified retirement plans.

Plan participants may choose to invest their pre-tax saving contributions in one or more of twenty-two investment options offered by the Putnam, Vanguard, Neuberger Berman, Baron, Julius Baer, PIMCO, DWS Dreman, Van Kampen Investments and/or the AIC Common Stock Fund.  The fund choices include the Putnam Money Market Fund, the Putnam U.S. Government Income Trust, the Putnam High Yield Trust, the Putnam Voyager Fund, the DWS Dreman Small Cap Value, the Van Kampen Growth & Income Fund,  the Neuberger Berman Genesis Trust, Vanguard 500 Index Admiral Shares, Baron Small Cap Fund, Julius Baer International Equity Fund, PIMCO Total Return Fund, AIC Common Stock Fund, Putnam RetirementReady Maturity, Putnam RetirementReady 2010, Putnam RetirementReady 2015, Putnam RetirementReady 2020, Putnam RetirementReady 2025, Putnam RetirementReady 2030, Putnam RetirementReady 2035, Putnam RetirementReady 2040, Putnam RetirementReady 2045 and Putnam RetirementReady 2050.

Funds added in October, 2006 include the DWS Dreman Small Cap Value Fund and the Van Kampen Growth & Income Fund.  The only fund discontinued in 2006 was the Putnam Fund for Growth & Income.

6



Participant loans are made in compliance with federal regulations in effect at the time of the loan.  The loan origination fee is paid directly to the trustee and is withdrawn directly from the participant’s account at the date of the loan issue.  Participant loans outstanding, included in investments, amounted to $733,674 at December 31, 2006, and $586,672 at December 31, 2005.

The Plan provides for employer matching contributions where the employer matches 18% on the first 15% of employee's pre-tax saving contributions, provided the employee has been employed by the employer for one year or more and is not a highly compensated employee as defined by federal tax laws.  The employer matching contributions are initially invested in the AIC Common Stock Fund, but participants are able to reallocate the employer match among each of the twenty-two investment options in the Plan.

A participant's interest in the employer matching contribution vests at a rate of 20% per year after one year of service with 100% vesting after five years.  Any non-vested portion of employer matching contributions to the accounts of participants who withdraw from the Plan are forfeited in compliance with federal regulations and used by the employer to reduce future matching contributions.  Amounts forfeited by employees that were applied to matching contributions totaled $171,350 in 2006 and $250,006 in 2005.

Distributions are available to participants upon one of the following events; termination of employment upon normal retirement, termination of employment on account of disability, death prior to termination for any other reason, or a change in control of the Employer.  Distribution to a participant shall be made in cash or in kind, by payment in a lump sum.  To receive distributions or withdrawals, participants contact Putnam and fill out a request.  For participants who have terminated their employment, balances under $1,000 are automatically distributed within 90 days.

Although the Company has not expressed intent to discontinue the Plan, it may do so at any time, subject to provisions set forth in ERISA.  If the Plan is terminated, no further contributions will be made and participants would become 100% vested in their entire account balance.  The trustee will continue to hold the funds and make distributions as if the Plan had not terminated.

C.       Trustee and Administration of the Plan

Mercer Trust Company has been designated as trustee and custodian.  The Company has established a Savings and Investment Plan Committee for the general administration of the Plan.  The Company pays the trustee fees on behalf of the Plan.

D.       Related Party Transactions

Certain Plan investments are shares of mutual funds managed by Mercer Investments.  These transactions qualify as exempt party-in-interest transactions.

At December 31, 2006 and December 31, 2005, the Plan held 1,632,815 and 1,730,580 shares, respectively, of common stock of Analysts International Corporation, the sponsoring employer, with a cost basis of $9,210,592 and $10,645,232 respectively.  During the years ended December 31, 2006 and December 31, 2005, the Plan did not record dividend income from this stock.

E.       Internal Revenue Service Status

The Internal Revenue Service has determined and informed the Company by a letter dated December 11, 2002, that the Plan was designed in accordance with applicable Internal Revenue Code requirements.  The plan has been amended since receiving the determination letter, however, the Company believes the plan is designed and is currently being operated in compliance with the applicable sections of the Internal Revenue Code.  The Plan’s sponsor is committed to correcting all operational errors, if any, to maintain the Plan's qualified tax status.  Because the trust is considered exempt from income tax, no provisions for tax have been added.

7


F.       Investments

Investments Greater than 5% of Plan Net Assets as of December 31, 2006 or December 31, 2005
 
   
   
December 31,
   
December 31,
 
   
2006
   
2005
 
Investments at market value:
           
Putnam Money Market Fund
  $
5,240,950
    $
4,988,796
 
Putnam U.S. Government Income Trust                                    
    3,822,925 **    
4,201,305
 
Putnam Fund for Growth and Income
   
*
     
12,502,684
 
Putnam Voyager Fund
   
16,301,518
     
18,467,991
 
Vanguard 500 Index Admiral Shares
   
5,518,215
     
4,951,746
 
Neuberger Berman Genesis Trust
   
4,970,555
     
5,532,629
 
Baron Small Cap Fund
   
6,591,161
     
6,187,828
 
Julius Baer International Equity Fund
   
13,994,013
     
9,207,038
 
Van Kampen Growth & Income Fund
   
12,600,041
     
*
 
AIC Common Stock Fund
    3,053,364 **    
4,153,392
 

*Fund did not exist during timeframe.
**Investment was less than 5% of plan net assets, but is included for comparison purposes.
 
The Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated / (depreciated) in value as follows:

   
December 31,
2006
   
December 31,
2005
 
             
Mutual Funds
  $
4,496,867
    $
2,821,934
 
AIC Common Stock Fund
    (766,438 )     (2,904,068 )
                 
    $
3,730,429
    $ (82,134 )

8


G.       Non-Participant Directed Investments

Information about the net assets and the significant components of the changes in net assets relating to the non-participant directed investments is as follows:

   
December 31,
   
December 31,
 
   
2006
   
2005
 
Net assets:
           
AIC Common Stock Fund – total
  $
3,053,364
    $
4,153,392
 
Less:  AIC Common Stock Fund - participant directed
    (3,053,364 )     (4,153,392 )
                 
AIC Common Stock Fund - non-participant directed
  $
0
    $
0
 

             
   
December 31,
   
December 31,
 
   
2006
   
2005
 
Change in net assets:
           
Contributions by employer
  $
343,538
    $
262,601
 
Forfeitures transferred
   
171,350
     
250,006
 
Release of funds to participants
    (514,888 )     (512,607 )
                 
    $
0
    $
0
 


H.       Reconciliation Between Financial Statements and Form 5500

The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31:

   
2006
   
2005
 
             
Net assets available for benefits per the financial statements
  $
81,486,438
    $
77,868,054
 
Less:  Deemed distribution activity
    (100,260 )     (42,677 )
                 
Net assets available for benefits per Form 5500
  $
81,386,178
    $
77,825,377
 

The following is a reconciliation of deemed distributions of loans per the financial statements to the Form 5500 for the year ended December 31, 2006:
   
2006
 
       
Deemed distribution of loans per the financial statements
  $
0
 
Deemed distribution activity
  $ (100,260 )
         
Deemed distribution activity per the Form 5500
  $ (100,260 )

Deemed distributions are recorded on the Form 5500 for active participants who defaulted on their loans and deemed to have taken a distribution of their loan amount.

9


SUPPLEMENTAL SCHEDULES FURNISHED PURSUANT TO
THE REQUIREMENTS OF FORM 5500


ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN
EIN 41-0905408, PLAN# 001

SCHEDULE H, PART IV, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR)

   
Number of
         
Current
 
   
Shares
   
Cost
   
Value
 
Mutual Funds:
                 
Putnam Money Market Fund *
   
5,240,950
    $
5,240,950
    $
5,240,950
 
Putnam U.S. Government Income Trust *
   
292,273
     
3,796,903
     
3,822,925
 
Putnam High Yield Trust *
   
455,612
     
4,168,968
     
3,695,011
 
Putnam Voyager Fund *
   
890,307
     
15,376,766
     
16,301,518
 
Putnam RetirementReady Maturity *
   
3,887
     
222,224
     
222,194
 
Putnam RetirementReady 2010 *
   
6,795
     
399,521
     
394,371
 
Putnam RetirementReady 2015 *
   
4,803
     
314,127
     
319,180
 
Putnam RetirementReady 2020 *
   
10,831
     
714,803
     
731,609
 
Putnam RetirementReady 2025 *
   
6,789
     
493,029
     
508,431
 
Putnam RetirementReady 2030 *
   
9,733
     
660,791
     
701,155
 
Putnam RetirementReady 2035 *
   
6,484
     
445,297
     
475,345
 
Putnam RetirementReady 2040 *
   
3,939
     
289,952
     
299,575
 
Putnam RetirementReady 2045 *
   
3,806
     
273,858
     
292,505
 
Putnam RetirementReady 2050 *
   
1,765
     
100,451
     
108,900
 
Vanguard 500 Index Admiral Shares
   
42,256
     
4,479,080
     
5,518,215
 
Neuberger Berman Genesis Trust
   
104,139
     
4,418,050
     
4,970,555
 
Baron Small Cap Fund
   
288,706
     
6,162,223
     
6,591,161
 
Julius Baer International Equity Fund
   
331,376
     
11,255,246
     
13,994,013
 
PIMCO Total Return Fund
   
60,699
     
638,489
     
630,052
 
DWS Dreman Small Cap Value
   
7,374
     
282,555
     
278,206
 
Van Kampen Growth & Income Fund
   
570,138
     
12,629,122
     
12,600,041
 
Common Stock:
AIC Common Stock*
   
1,632,815
     
9,210,592
     
3,053,364
 
                         
Promissory notes from participants*
   
-
     
733,674
     
733,674
 
Interest rates ranging from 4.5% to 9.0% with maturity dates through January 2012
                       
            $
82,306,671
    $
81,482,950
 


* Known to be a party-in-interest.

10


ANALYSTS INTERNATIONAL CORPORATION
SAVINGS AND INVESTMENT PLAN

SCHEDULE H, PART IV, LINE 4j
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2006


Identity of Party Involved
Description of Transaction
 
Purchase Price
   
Selling Price
   
Cost of Asset
   
Current Value of Assets on Transaction Date
   
Net Gain
 
                                 
Mercer Investments*
Purchases of AIC Stock
  $
749,784
          $
749,784
    $
749,784
       
                                       
Mercer Investments*
 
Sales of AIC Stock
          $
1,083,374
    $
1,020,091
    $
1,083,374
    $
63,283
 

*Known to be a party-in-interest.

11


SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized.


   
ANALYSTS INTERNATIONAL CORPORATION
   
SAVINGS AND INVESTMENT PLAN
     
Date:  June 29, 2007
By:
/s/ David J. Steichen
   
David J. Steichen, Chief Financial Officer

12


EXHIBIT INDEX


Exhibit No.
 
Description
     
23
 
Consent of Independent Registered Public Accounting Firm

13