-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BLyem3tcMBgY2W8rp+5p4iAgGEWKsbQdNdGCOMSBz7HKDxpQSOOnj6jKmPxs97Wp CXbOKg4CeyFfnogwwLAGow== 0000912057-97-016736.txt : 19970513 0000912057-97-016736.hdr.sgml : 19970513 ACCESSION NUMBER: 0000912057-97-016736 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANALYSTS INTERNATIONAL CORP CENTRAL INDEX KEY: 0000006292 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 410905498 STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04090 FILM NUMBER: 97600292 BUSINESS ADDRESS: STREET 1: 7615 METRO BLVD CITY: MINNEAPOLIS STATE: MN ZIP: 55439 BUSINESS PHONE: 6128974506 MAIL ADDRESS: STREET 1: 7615 METRO BLVD CITY: MINNEAPOLIS STATE: MN ZIP: 55439 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-4090 ANALYSTS INTERNATIONAL CORPORATION Minnesota 41-0905408 7615 Metro Boulevard Minneapolis, MN 55439 (612) 835-5900 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- As of April 25, 1997, 14,818,293 shares of the Registrant's Common Stock were outstanding. ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- INDEX ----- Page Number ------ PART I. FINANCIAL INFORMATION: Item 1. Condensed Consolidated Balance Sheets March 31, 1997 (Unaudited) and June 30, 1996 1 Condensed Consolidated Statements of Income Three and nine months ended March 31, 1997 and 1996 (Unaudited) 2 Condensed Consolidated Statements of Cash Flows Nine months ended March 31, 1997 and 1996 (Unaudited) 3 Notes to Condensed Consolidated Financial Statements (Unaudited) 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-6 ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS ------
March 31, June 30, (In thousands) 1997 1996 ----------- ------- (Unaudited) Current assets: Cash and cash equivalents $13,714 $17,018 Accounts receivable, less allowance for doubtful accounts 62,089 49,494 Other current assets 2,913 2,567 ------ ------ Total current assets 78,716 69,079 Property and equipment, net 5,856 5,715 Other assets 11,238 6,651 ------ ------ $95,810 $81,445 ------ ------ ------ ------
LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------
Current liabilities: Accounts payable $14,447 $11,049 Dividend payable 1,334 1,099 Salaries and vacations 9,274 7,524 Other, primarily self-insured health care reserves 1,228 1,677 Income taxes payable 475 382 ------ ------ Total current liabilities 26,758 21,731 Long-term liabilities 6,398 5,996 Shareholders' equity (Note 2) 62,654 53,718 ------ ------ $95,810 $81,445 ------ ------ ------ ------
Note: The balance sheet at June 30, 1996 has been taken from the audited financial statements at that date, and condensed. See notes to condensed consolidated financial statements. 1 ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands Three Months Ended Nine Months Ended except per share amounts) March 31 March 31 --------------------------- ---------------------------- 1997 1996 1997 1996 ---- ---- ---- ---- Revenues $113,693 $ 85,976 $313,562 $237,833 Expenses: Salaries, contracted services and direct charges 88,274 65,984 242,281 181,494 Selling, administrative and other operating costs 18,722 14,709 52,071 42,168 ------ ------ ------ ------ Total expenses 106,996 80,693 294,352 223,662 ------- ------ ------- ------- Operating income 6,697 5,283 19,210 14,171 Other income 239 281 755 801 ------ ------ ------ ------ Income before income taxes 6,936 5,564 19,965 14,972 Income taxes 2,775 2,226 8,031 5,943 ----- ----- ----- ----- Net income $ 4,161 $ 3,338 $ 11,934 $ 9,029 ------ ------ ------ ------ ------ ------ ------ ------ PER COMMON SHARE:* Net income $ .28 $ .23 $ .80 $ .61 ------ ------ ------ ------ ------ ------ ------ ------ Dividends paid $ .09 $ .075 $ .255 $ .215 ------ ------ ------ ------ ------ ------ ------ ------ Average common and common equivalent shares outstanding* 15,057,000 14,820,000 14,998,000 14,788,000 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
*Adjusted to reflect the 2 for 1 common stock split in the form of a stock dividend distributed September 30, 1996. See notes to condensed consolidated financial statements. 2 ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended March 31 ------------------ (In thousands) 1997 1996 ---- ---- Net cash provided by operating activities $ 6,861 $11,600 Cash flows from investing activities: Property and equipment additions (1,929) (2,062) Increase in annuities and cash surrender values (320) (286) Payments for acquisitions (5,153) - ----- ----- Net cash used in investing activities (7,402) (2,348) Cash flows from financing activities: Cash dividends (3,748) (3,129) Proceeds from exercise of stock options 985 236 ----- ----- Net cash used in financing activities (2,763) (2,893) ----- ----- Net change in cash and equivalents (3,304) 6,359 Cash and equivalents at beginning of period 17,018 12,615 ------ ------ Cash and equivalents at end of period $13,714 $18,974 ------ ------ ------ ------ See notes to condensed consolidated financial statements. 3 ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Condensed Consolidated Financial Statements - The condensed consolidated balance sheet as of March 31, 1997, the condensed consolidated statements of income for the three month and nine month periods ended March 31, 1997 and 1996 and the condensed consolidated statements of cash flows for the nine month periods then ended have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and the cash flows at March 31, 1997 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 1996 annual report to shareholders. 2. SHAREHOLDERS' EQUITY Nine Months Ended March 31, 1997 ----------------- (In thousands) Balance at beginning of period $ 53,718 Cash dividends declared: August 15, 1996 at $.09 per share (1,319) December 19, 1996 at $.09 per share (1,324) February 15, 1997 at $.09 per share (1,340) Proceeds upon exercise of stock options 985 Net income 11,934 ------ Balance at end of period $ 62,654 ------ ------ 3. NET INCOME PER COMMON SHARE In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share". This statement specifies the computation, presentation and disclosure requirements for earnings per share (EPS). This Statement is effective for financial statements issued for periods ending after December 15, 1997, including interim periods. This statement replaces the presentation of primary EPS with a presentation of basic EPS. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. If the Company had applied SFAS No. 128 to the computation of earnings per share in the nine months ended March 31, 1997, the basic and diluted amounts would have been $.81 and $.79, respectively. 4 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Nine Months Ended March 31, 1997 and 1996 CHANGES IN FINANCIAL CONDITION On July 1, 1996, the Company acquired specific assets and assumed certain liabilities of DPI, Inc. and DPI Services, Inc., its wholly owned subsidiary, both of which were primarily engaged in the business of providing software services in the San Jose (California) market. At the closing, the company paid $5.2 million of the $5.7 million adjusted purchase price in cash, with the remaining $.5 million, subject to certain deductions, being payable in cash in one year. Assets acquired included approximately $1.5 million of current assets (accounts receivable) net of current liabilities assumed in the transaction. Other assets acquired in the transaction (including goodwill, reflecting the excess of the adjusted purchase price over the fair value of the assets acquired) are shown on the balance sheet as long term assets. The reduction in the Company's cash from $17.0 million to $13.7 million is the consequence of this acquisition. The Company's primary need for working capital is to support accounts receivable resulting from the growth in its business and to fund the time lag between payroll disbursement and receipt of fees billed to clients. Over the past years, the Company has been able to support the growth in its business with internally generated funds. The Company's outsourcing contracts with two major customers are not expected to burden working capital. On February 20, 1997 the Board of Directors declared the regular quarterly dividend of $.09 per share payable May 15, 1997 to shareholders of record on April 30, 1997. The Company believes funds generated from its business and current cash balances are adequate to meet demands placed upon its resources by its operations and the payment of quarterly dividends. 5 RESULTS OF OPERATIONS Revenues for the nine months ended March 31, 1997 and for the quarter then ended were $314 million and $114 million, respectively. This represents increases of 31.8% and 32.2% over the same periods a year ago. These revenue increases resulted primarily from increases in billable hours of service rendered to clients and increases in pass-through billings on the Company's outsourcing contracts. For the nine month period and quarter ended March 31, 1997, these pass-through billings approximated $65.9 million and $25.4 million, respectively, compared with $42.1 million and $15.4 million for the same periods a year ago. Rate increases have not contributed significantly to the revenue increase because prevailing competitive conditions in the industry have made it difficult for the Company to increase the hourly rates it charges for services. Personnel totalled 4,400 at March 31, 1997, compared to 3,670 at March 31, 1996, an increase of 19.9%. Substantially all of the increase consists of billable technical staff. Salaries, contracted services and direct charges, which represent primarily the Company's direct labor cost, were 77.3% of revenues for the nine months ended March 31, 1997 compared to 76.3% for the same period a year ago. These costs as a percentage of revenues for the quarters ended March 31, 1997 and 1996 were 77.6% and 76.7%, respectively. By comparison, these costs were 76.9% of revenues for the second quarter of fiscal 1997 and 77.2% of revenues for the first quarter of fiscal 1997. 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 and intense competition in the industry makes it difficult to pass cost increases on to customers, while unfavorable economic conditions could adversely affect productivity. This category of expense also includes the fees for the contracted services of subcontractors who are necessary to support the Company with its major outsourcing contracts and these fees typically are higher per hour than the labor costs for its own employees. Although the Company has taken steps to control this category of expense, there can be no assurance the Company will be able to maintain or improve this level. Selling, administrative and other operating costs, which include commissions, employee fringe benefits and location costs, represented 16.6% of revenues for the nine months ended March 31, 1997 compared to 17.7% for the same period a year ago. For the quarter ended March 31, 1997 these costs were 16.5% of revenue compared to 17.1% for the same quarter last year. While the Company has been successful in controlling selling, administrative and other operating costs and is committed to careful cost management, there can be no assurance the Company will be able to maintain these costs at their current relationship to revenues. 6 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 11 - Computation of Net Income Per Share. Exhibit 27 - Financial Data Schedule (b) There were no reports on Form 8-K filed for the nine months ended March 31, 1997. 7 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized. ANALYSTS INTERNATIONAL CORPORATION ---------------------------------- (Registrant) Date May 12, 1997 By /s/ Gerald M. McGrath ------------- ---------------------- Gerald M. McGrath Treasurer and Chief Financial Officer Date May 12, 1997 By /s/ Marti R. Charpentier ------------- ------------------------- Marti R. Charpentier Controller and Assistant Treasurer (Chief Accounting Officer) 8 EXHIBIT INDEX ------------- EXHIBIT NUMBER EXHIBIT PAGE NO.* - -------------- ------- --------- 11 Computation of Net Income Per Share 13 27 Financial Data Schedule 15 * Page numbers in the sequential numbering system of the manually signed original report. EX-11 2 COMPUTATION OF NET INCOME PER SHARE EXHIBIT NO. 11 ANALYSTS INTERNATIONAL CORPORATION COMPUTATION OF NET INCOME PER SHARE
Three Months Ended Nine Months Ended (IN THOUSANDS EXCEPT March 31 March 31 ------------------------ ------------------------ PER SHARE AMOUNTS) 1997 1996 1997 1996 ---- ---- ---- ---- Primary: Weighted average number of common shares outstanding 14,762 14,584 14,697 14,552 Dilutive stock options after application of treasury stock method 295 236 301 236 ----- ----- ----- ----- Weighted average number of common and common equivalent shares outstanding 15,057 14,820 14,998 14,788 ------ ------ ------ ------ ------ ------ ------ ------ Net income $ 4,161 $ 3,338 $11,934 $ 9,029 ------ ------ ------ ------ ------ ------ ------ ------ Per share amount $ .28 $ .23 $ .80 $ .61 ------ ------ ------ ------ ------ ------ ------ ------ Fully diluted: Weighted average number of common shares outstanding 14,762 14,584 14,697 14,552 Dilutive stock options based on the treasury stock method using the end of the period market price, if higher than average market price 295 252 337 252 ------ ------ ------ ------ Weighted average number of common and common equivalent shares outstanding 15,057 14,836 15,034 14,804 ------ ------ ------ ------ ------ ------ ------ ------ Net income $ 4,161 $ 3,338 $11,934 $ 9,029 ------ ------ ------ ------ ------ ------ ------ ------ Per share amount $ .28 $ .23 $ .79 $ .61 ------ ------ ------ ------ ------ ------ ------ ------
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JUN-30-1997 JUL-01-1996 MAR-31-1997 13,714 0 62,599 510 0 78,716 17,149 11,293 95,810 26,758 6,398 0 0 1,482 61,172 95,810 313,562 313,562 242,281 242,281 51,823 248 0 19,965 8,031 11,934 0 0 0 11,934 .80 .80
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