SOURCE: Analysts International Corporation

Analysts International Corporation

February 24, 2011 17:05 ET

Analysts International Corporation Reports Fourth Quarter and Fiscal Year 2010 Financial Results

MINNEAPOLIS, MN--(Marketwire - February 24, 2011) - Analysts International Corporation (NASDAQ: ANLY)

--  Company reports net income of $0.9 million, representing its second
    consecutive quarter of profitability
--  Revenue was $25.3 million, a 4.8% decrease from the 2009 fourth
    quarter. Adjusting for the planned exit from non-core lines of
    business, revenue declined 1.9% from the 2009 fourth quarter
--  Gross margin rates were 24.8%, an improvement of 370 basis points from
    the 2009 fourth quarter
--  Selling, administrative and other operating costs decreased by
    $2.3 million or 30.2% from the 2009 fourth quarter
--  Company amends credit facility with more favorable terms and extends
    agreement to September 2014

Analysts International Corporation (AIC) (NASDAQ: ANLY), an information technology services company, today announced financial results for the fourth quarter and fiscal year 2010 which ended on January 1, 2011.

AIC reported fourth quarter revenue of $25.3 million as compared to 2009 fourth quarter revenue of $26.6 million. AIC reported a 2010 fourth quarter net income of $0.9 million, or $0.19 per share, as compared to a 2009 fourth quarter net loss of $3.2 million, or $0.63 per share. The 2009 fourth quarter net loss included restructuring charges of $1.1 million, or $0.22 per share.

For fiscal year 2010, AIC reported revenue of $106.7 million compared to $143.2 million in fiscal year 2009. The net loss for fiscal 2010 was $0.5 million, or $0.10 per share, compared to a net loss of $15.9 million, or $3.19 per share, in the prior year. The fiscal 2010 loss included a net reversal of certain restructuring obligations previously recorded of $0.3 million, or $0.06 per share. Excluding these charges, the Company's net loss was $0.8 million in fiscal 2010, or $0.16 per share. The fiscal 2009 loss included a non-cash charge for $2.3 million to impair our intangible assets and a $3.8 million restructuring charge, or $1.22 per share. Excluding these charges, the Company's net loss was $9.8 million in fiscal 2009, or $1.97 per share.

"We are pleased to have delivered our second consecutive quarter of profitability," said President and CEO Brittany McKinney. "Our IT staffing business has stabilized, our gross margin rates have increased significantly and we have made considerable progress towards getting our costs in line with what the business requires. In addition, the business generated positive annual Adjusted EBITDA for the first time in two years.

"In 2011, we expect to maintain profitability and will balance bottom line performance with the investments required to grow the company," added McKinney. "We will continue to build on the strengths of our brand, our long-standing client relationships and our core markets."

2010 Fourth Quarter and Fiscal Year Review

Our revenues decreased $1.3 million, or 4.8%, in the fourth quarter of 2010 compared to the fourth quarter of 2009, and by $36.5 million, or 25.5%, for fiscal year 2010, when compared to fiscal year 2009. Adjusting for the exit from non-core lines of business, revenue declined 1.9% and 7.5% from the 2009 fourth quarter and fiscal year 2009, respectively. There were 61 billing days in the 2010 fourth quarter as compared to 60 billing days in the 2009 fourth quarter.

In the fourth quarter of 2010, gross margins were $6.3 million, or 24.8% of revenue, as compared to $5.6 million, or 21.1% of revenue in the fourth quarter of 2009. Gross margins were $23.8 million, or 22.3% of revenue, for the fiscal year 2010, compared to $28.6 million, or 20.0% of revenue, for fiscal year 2009. The increase in gross margins as a percent of revenue reflects the impact of implementing our strategy of exiting non-core lines of business and securing higher margin business. Adjusting for the exit from non-core lines of business, margins improved 380 basis points and 290 basis points compared to the 2009 fourth quarter and fiscal year 2009, respectively.

Selling, general and other administrative expenses declined by $2.3 million in the fourth quarter of 2010, when compared to the fourth quarter of 2009, and by $13.3 million for fiscal year 2010, when compared to fiscal year 2009. The decrease in our SG&A expense is primarily the result of our exit from non-core lines of business, our business restructuring actions and our overall expense reduction efforts.

We used cash from operations of $0.3 million in the fourth quarter of 2010 compared to using cash from operations of $3.6 million in the fourth quarter of 2009. For fiscal year 2010, we generated cash from operations of $0.6 million compared to using cash from operations of $0.4 million for fiscal year 2009. As of January 1, 2011, we had a cash balance of $4.3 million and no borrowings from our $15 million credit facility.

Amended Credit Facility

On February 23, 2011, the Company amended its credit facility agreement with Wells Fargo Bank, National Association. The amended agreement reduces the Company's unused line fees, lowers the interest rate on future borrowings, amends the financial covenant to be less restrictive and extends the agreement to September 2014.

Fourth Quarter and Fiscal Year 2010 Conference Call

AIC will host a conference call on Friday, February 25 at 10 a.m. CT to discuss the fourth quarter and fiscal year 2010 financial results. Participants may access the call by dialing 1.888.587.0549, passcode 8720014. Live audio of the conference may also be accessed via the Internet at www.analysts.com, where it will be archived for 90 days following the completion of the conference call. Interested parties can also hear a replay of the call from 1 p.m. CT on February 25, 2011, to 10:59 p.m. CT on March 3, 2011, by calling 1.888.203.1112, or 1.719.457.0820 for international callers, and using access code 8720014.

About Analysts International Corporation

Analysts International Corporation (AIC) is an IT services firm fully dedicated to the success and satisfaction of its clients. From IT staffing to project-based solutions, AIC provides a broad range of services designed to help businesses and government agencies drive value, control costs and deliver on the promise of a more efficient and productive enterprise. The Company offers a flexible, collaborative approach; clear industry perspective; and the breadth, scale and experience to deliver results. 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. Statements made in this press release (or during the conference call referred to herein) by the Company, its President and CEO Brittany McKinney or its CFO Randy Strobel, regarding, for instance: Current expectations as to future financial performance, AIC's ability to execute against its strategic plan, management's beliefs with respect to its ability to manage its business, increase revenues, maintain profitability, achieve industry standard gross profit margin rates, build cash and return value to its shareholders, are forward-looking statements. These forward-looking statements are based on current information, which we have assessed, which by its nature is dynamic and subject to rapid and even abrupt changes. As such, results may differ materially in response to a change in this information. Forward-looking statements include statements expressing the intent, belief or current expectations of AIC and members of our management team and involve certain risks and uncertainties, including (i) the risk that management may not fully or successfully implement its business plan or maintain profitability in the future; (ii) the risk that AIC will not be able to realize the benefits of its investments or exploit other opportunities of the business in a timely manner or on favorable terms; (iii) prevailing market conditions in the IT services industry, including intense competition for billable technical personnel at competitive rates, strong pricing pressures from many of our largest clients and difficulty in identifying, attracting and retaining qualified billable technical personnel; (iv) potentially incorrect assumptions by management with respect to the financial effect of prior cost reduction initiatives and current strategic decisions; and (v) other economic, business, market, financial, competitive and/or regulatory factors affecting AIC's business generally, including those set forth in AIC's filings with the SEC. You are cautioned not to place undue reliance on these or any forward-looking statements, which speak only as of the date of this press release and conference call. Such forward-looking statements should be read in conjunction with the Company's filings with the SEC. AIC assumes no responsibility to update the forward-looking statements contained in this release.

                    Analysts International Corporation
                  Consolidated Statements of Operations


                                 Three Months Ended   Twelve Months Ended
                                --------------------  --------------------
(In thousands except per share   Jan. 1,    Jan. 2,    Jan. 1,    Jan. 2,
 amounts)                         2011       2010       2011       2010
                                ---------  ---------  ---------  ---------

Revenue:
Professional services provided
 directly                       $  25,325  $  26,127  $ 106,056  $ 131,338
Professional services provided
 through subsuppliers                  16        477        632      2,488
Product sales                           -          -          -      9,339
                                ---------  ---------  ---------  ---------
Total revenue                      25,341     26,604    106,688    143,165

Expenses:
Cost of services provided
 directly                          19,039     20,547     82,313    104,251
Cost of services provided
 through subsuppliers                  16        435        598      2,350
Cost of product sales                   -          -          -      7,973
Total  cost of goods sold          19,055     20,982     82,911    114,574

Gross margin                        6,286      5,622     23,777     28,591

Expenses:
Selling, administrative and
 other operating costs              5,345      7,653     24,554     37,886
Restructuring costs and other
 severance related costs                -      1,117       (300)     3,825
Intangible assets impairment            -          -          -      2,268
Amortization of intangible
 assets                                 -          -          -        491
                                ---------  ---------  ---------  ---------
Total expenses                      5,345      8,770     24,254     44,470

Operating income (loss)               941     (3,148)      (477)   (15,879)

Non-operating income                    -          6         14         41
Interest expense                       (2)       (19)       (13)       (39)
                                ---------  ---------  ---------  ---------

Income (loss) before income
 taxes                                939     (3,161)      (476)   (15,877)

Income tax (benefit) expense           (1)        (1)         4         30
                                ---------  ---------  ---------  ---------

Net income (loss)               $     940  $  (3,160) $    (480) $ (15,907)
                                =========  =========  =========  =========

Per common share:
Basic income (loss)             $    0.19  $   (0.63) $   (0.10) $   (3.19)
Diluted income (loss)           $    0.19  $   (0.63) $   (0.10) $   (3.19)

Weighted-average shares
 outstanding:
Basic                               4,986      4,985      4,986      4,985
Diluted                             4,987      4,985      4,986      4,985




                    Analysts International Corporation
                  Condensed Consolidated Balance Sheets


                                                   January 1,   January 2,
(In thousands)                                        2011         2010
                                                   -----------  -----------

ASSETS
Current assets:
Cash and cash equivalents                          $     4,328  $     3,818
Accounts receivable, less allowance for doubtful
 accounts                                               17,425       23,028
Other current assets                                       643        1,442
                                                   -----------  -----------
Total current assets                                    22,396       28,288


Property and equipment, net                                784        1,846
Other assets, net                                          432          543
Total assets                                       $    23,612  $    30,677
                                                   ===========  ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable                                   $     4,261  $     6,958
Line of credit                                               -            -
Salaries and benefits                                    2,189        2,498
Deferred revenue                                           359          310
Deferred compensation                                      181          522
Restructuring accrual                                      339        2,038
Other current liabilities                                  694          960
                                                   -----------  -----------
Total current liabilities                                8,023       13,286

Non-current liabilities:
Deferred compensation                                      901        1,037
Restructuring accrual                                      167        1,045
Other long-term liabilities                                 52          361


Shareholders' equity                                    14,469       14,948
                                                   -----------  -----------
Total liabilities and shareholders' equity         $    23,612  $    30,677
                                                   ===========  ===========




                    Analysts International Corporation
              Reconciliation of non-GAAP Financial Measures


                              Three Months Ended      Twelve Months Ended
                            ----------------------  ----------------------
                            January 1,  January 2,  January 1,  January 2,
(In thousands)                 2011        2010        2011        2010
                            ----------  ----------  ----------  ----------

Net income (loss) as
 reported                   $      940  $   (3,160) $     (480) $  (15,907)
Plus:
Impairment of intangible
 assets                              -           -           -       2,268
Restructuring costs and
 other severance related
 costs                               -       1,117        (300)      3,825
Loss (gain) on asset sales           -         140          48        (259)
Other consulting &
 transaction related costs           -           -           -         485
                            ----------  ----------  ----------  ----------

Income (loss) before other
 reconciling items                 940      (1,903)       (732)     (9,588)

Stock based compensation
 expense                            34         162           1         460
Depreciation                       183         262         860       1,348
Amortization                         -           -           -         491
Net interest and
 non-operating expense
 (income)                            2          13          (1)         (2)
Income tax (benefit)
 expense                            (1)         (1)          4          30
                            ----------  ----------  ----------  ----------

Adjusted EBITDA             $    1,158  $   (1,467) $      132  $   (7,261)
                            ==========  ==========  ==========  ==========

* Non-GAAP Financial Information

In evaluating the Company's business, the Company's management considers and uses Adjusted EBITDA as a supplemental measure of operating performance. Adjusted EBITDA refers to a financial measure that the Company defines as net income (loss) excluding interest, taxes, depreciation, amortization, share-based compensation, special charges and other gains and losses that are not related to the Company's operations. This measure is an essential component of the Company's internal planning process because it facilitates period-to-period comparisons of the Company's operating performance by eliminating potential differences in net income (loss) caused by the existence and timing of certain non-cash items, special charges and other gains and losses. 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 Contact:
    Marne Oberg
    Analysts International Corporation
    952.838.2867
    Email Contact