SOURCE: Analysts International

November 05, 2007 18:30 ET

Analysts International Reports Q3 2007 Results; Newly-Appointed President and CEO to Focus on Profitability and Performance

MINNEAPOLIS, MN--(Marketwire - November 5, 2007) - Analysts International (NASDAQ: ANLY) reported the results for its third quarter ended September 29, 2007. Revenues totaled $93.5 million for the quarter, compared to $85.5 million for the same quarter in 2006. For the quarter, the Company reported a net loss of $(448,000), or $(.02) per diluted share, compared to a net loss of $(522,000) or $(.02) per diluted share during the third quarter of 2006.

For the nine months ended September 29, 2007, the Company reported revenues of $271.9 million compared to $260.2 million for the same period in 2006. The net loss for the period was $(3.2 million) or $(.13) per diluted share compared to a net loss of $(526,000), or $(0.02) per diluted share period in 2006.

"During the third quarter we continued to operate ahead of the performance improvement plan adopted in April," stated Interim President and CEO Mike LaVelle. "We continued our focus on daily operating and performance standards to meet strong client demand, and we benefited from the cost reduction and business process improvements implemented in the second quarter. We are continuing to make investments in sales and recruiting talent, and we expect to see further improvements in the fourth quarter as we continue our work on developing a strategic plan to integrate our staffing and solutions businesses into a full-spectrum IT professional services offering."

"The results of the third quarter show the progress the Company has made during Mike LaVelle's interim leadership," stated newly-appointed President and CEO, Elmer Baldwin. "Our focus will continue to be on returning the Company to profitability. Our goal is to align our management team and our 2,800 associates to focus on the highly performing areas of our company, where the market is attractive and we are advantaged."

Analysts will host a conference call tomorrow at 9:30 a.m. CST to discuss these results in detail and answer questions participants may have. Interested parties may access the call by dialing 1-888-802-7345 or 1-973-582-2777 for international participants a few minutes before the scheduled start and ask for the Analysts International conference call moderated by Company President and CEO, Mike LaVelle. The call may also be accessed via the Internet at www.analysts.com, where it will be archived. Interested parties can also hear a replay of the call from 12:30 p.m. CST November 6, 2007 until 10:59 p.m. CST on November 13, 2007, by dialing 1-877-519-4471, or 1-973-341-3080 for international participants and using the access code 9369059. The Company will also file an 8-K with the Securities and Exchange Commission that will provide a full transcript of the prepared remarks delivered on the call.

About Analysts International

Headquartered in Minneapolis, Analysts International is a diversified IT services company. With sales and customer support offices in the United States and Canada, Analysts International provides information technology resources and solutions, including: Professional Services, which focuses on providing highly skilled placements; IT Resources Staffing, which is focused on providing reasonably priced resources to volume buyers effectively and on demand; and Technology Solutions, which provides network services, infrastructure, application integration, IP telephony and hardware solutions to the middle market. Analysts International's Symmetry Workforce Solutions is a flexible set of services that support a customer's supply chain management, ranging from resource allocation through billing and payment of suppliers. The company partners with best-in-class IT organizations, allowing access to a wide range of expertise, resources and expansive geographical reach. For more information, visit www.analysts.com.

Cautionary Statement for the Purpose of Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

This Press Release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by words such as "believe," "expect," "anticipate," "plan," "potential," "continue" or similar expressions. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements. Such forward-looking statements are based upon current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Statements made in this Press Release by the Company, its interim President and CEO, Michael J. LaVelle, or President and CEO, Elmer Baldwin, regarding: (i) additional operational improvements during the Company's fourth quarter of the fiscal year; (ii) integration of the Company's staffing and solutions offerings into a full-spectrum IT professional services offering; and (iii) focusing on highly performing areas of the Company in attractive markets where the Company holds an advantage are forward looking statements. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which the Company, Mr. LaVelle or Mr. Baldwin expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: (i) further operational improvements in the fourth quarter are not attainable; (ii) unsuccessful implementation or execution of the Company's new business plan/strategy; (iii) focus on highly performing areas of the Company's business does not result in improved performance; and (iv) other economic, business, competitive and/or regulatory factors affecting the Company's business generally, including those set forth in Analysts' filings with the SEC, including its Annual Report on Form 10-K for the 2006 fiscal year, especially in the Management's Discussion and Analysis section, its most recent Quarterly Report on Form 10-Q and its Current Reports on Form 8-K. All forward-looking statements included in this Press Release are based on information available to the Company on the date of the Press Release. The Company undertakes no obligation (and expressly disclaims any such obligation) to update forward-looking statements made in the Press Release to reflect events or circumstances after the date of the Press Release or to update reasons why actual results would differ from those anticipated in such forward-looking statements.

                    Analysts International Corporation
                  Consolidated Statements of Operations
                                (unaudited)


                                 Three Months Ended     Nine Months Ended
                                --------------------  --------------------
(in thousands except per share  September  September  September  September
 amounts)                       29, 2007   30, 2006   29, 2007   30, 2006
                                ---------  ---------  ---------  ---------

Revenue:
   Provided directly            $  59,938  $  65,655  $ 183,275  $ 196,969
   Provided through
    subsuppliers                   13,709     12,470     44,651     40,194
   Product sales                   19,898      7,355     43,975     23,064
                                ---------  ---------  ---------  ---------
   Total revenue                   93,545     85,480    271,901    260,227

Expenses:
   Salaries, contracted
    services and direct charges    61,117     64,333    189,253    195,443
   Cost of product sales           18,289      6,450     39,784     20,202
   Selling, administrative and
    other operating costs          14,105     14,876     43,478     44,200
   Merger related costs                --        (83)        --       (327)
   Restructuring and other
    severance related costs           337        (39)     1,759        (54)
   Amortization of intangible
    assets                            266        266        799        786
                                ---------  ---------  ---------  ---------

Operating loss                       (569)      (323)    (3,172)       (23)
Non-operating income                  227          5        251        114
Interest expense                     (100)      (194)      (243)      (586)
                                ---------  ---------  ---------  ---------

Loss before income taxes             (442)      (512)    (3,164)      (495)
Income tax expense                      6         10         34         31
                                ---------  ---------  ---------  ---------

Net loss                        $    (448) $    (522) $  (3,198) $    (526)
                                =========  =========  =========  =========

Per common share:
Basic loss                      $    (.02) $    (.02) $    (.13) $    (.02)
                                ---------  ---------  ---------  ---------
Diluted loss                    $    (.02) $    (.02) $    (.13) $    (.02)
                                ---------  ---------  ---------  ---------

Average common shares
 outstanding                       25,056     24,662     24,917     24,631
Average common and common
 equivalent shares outstanding     25,056     24,662     24,917     24,631




                    Analysts International Corporation
                        Consolidated Balance Sheets


                                              -------------- --------------
 (in thousands)                                September 30,  December 30,
                                                  2007           2006
                                               (unaudited)
                                              -------------- --------------
Assets

Current assets:
   Cash and cash equivalents                  $           83 $          179
   Accounts receivable, less allowance for
    doubtful accounts                                 69,707         64,196
   Other current assets                                3,014          2,484
                                              -------------- --------------
      Total current assets                            72,804         66,859

Property and equipment, net                            2,662          2,925
Other assets                                          25,471         26,447
                                              -------------- --------------
      Total assets                            $      100,937 $       96,231
                                              ============== ==============

Liabilities and Shareholders’ Equity

Current liabilities:
   Accounts payable                           $       27,600 $       24,411
   Salaries and vacations                              5,564          7,416
   Line of credit                                      8,901          2,661
   Deferred revenue                                    1,256          1,267
   Restructuring accrual, current portion                365            385
   Health care reserves and other amounts              1,117          1,670
   Deferred compensation                               1,329            208
                                              -------------- --------------
      Total current liabilities                       46,132         38,018

Non-current liabilities:
   Deferred compensation                               1,517          2,319
   Restructuring accrual                                  61            160
   Other liabilities                                     275             --
                                              -------------- --------------
Shareholders’ equity                                  52,952         55,734
                                              -------------- --------------
   Total liabilities and shareholders’ equity $      100,937 $       96,231
                                              ============== ==============




                    Analysts International Corporation
              Reconciliation of non-GAAP Financial Measures
                              (in thousands)


                                 Three Months Ended     Nine Months Ended
                                --------------------  --------------------
                                September  September  September  September
                                29, 2007   30, 2006   29, 2007   30, 2006
                                ---------  ---------  ---------  ---------


Net loss as reported            $    (448) $    (522) $  (3,198) $    (526)
Taxes                                   6         10         34         31
Depreciation                          391        629      1,283      1,809
Amortization                          266        266        799        786
Net interest expense (income)          71        189        190        571
Return of common stock               (198)        --       (198)        --
Merger related costs                   --        (83)        --       (327)
Restructuring, severance and
 consulting related costs             365        (39)     2,169        (54)
                                ---------  ---------  ---------  ---------

Adjusted EBITDA*                $     453  $     450  $   1,079  $   2,290
                                =========  =========  =========  =========

*To supplement our consolidated financial statements presented in accordance with GAAP, we use the non-GAAP financial measure of Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) which is adjusted from results based on GAAP to exclude certain items. For the 2007 periods, we have excluded costs associated with severance payments made as part of our performance improvement plan, the costs associated with outside consultants engaged by the Board of Directors, additional restructuring adjustments resulting from our inability to sublet portions of dormant space, and the return of common stock from an escrow account following the departure of two of the principals of a company we acquired in 2005. For the 2006 periods we have excluded credits resulting from the reversal of certain accruals associated with our attempted merger with Computer Horizons. We believe these adjustments are helpful in providing a meaningful comparison between current results and prior reported results. This non-GAAP financial measure is provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. This measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The non-GAAP financial measure included in this press release has been reconciled to the nearest GAAP measure.

Contact Information

  • Media Contacts:
    Al Galgano
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    Padilla Speer Beardsley
    (612) 455-1700