SOURCE: Analysts International

October 26, 2006 09:00 ET

Analysts International Reports Results for Third Quarter 2006

MINNEAPOLIS, MN -- (MARKET WIRE) -- October 26, 2006 -- Analysts International (NASDAQ: ANLY) reported its financial results for the three and nine-month periods ended September 30, 2006. Revenues totaled $85.5 million for the third quarter, compared to $78.2 million for the comparable quarter a year ago and $87.9 million for the second quarter. These results are consistent with the preliminary results the Company announced on October 16, 2006 and below the Company's previously issued third quarter guidance of $88 million to $90 million of revenue. For the quarter, the Company reported a net loss of $(522,000), or $(.02) per diluted share, compared to a net loss of $(15.6) million or $(.63) per diluted share for the third quarter of 2005, which included $13.3 million or $(.54) per diluted share of special charges.

For the nine months ended September 30, 2006, the Company reported revenues of $260.2 million compared to $236.4 million for the comparable period last year. The net loss for the period was $(526,000), or $(.02) per diluted share, compared to a net loss of $(18.7) million, or $(.76) per diluted share for the comparable period of 2005, including merger-related costs and other special charges totaling $14.9 million or $(.61) per diluted share.

Analysts will host a conference call today at 9:30 a.m. CT to discuss these results in detail and answer questions participants may have. Interested parties may access the call by dialing 1-888-694-4767 or 1-973-582-2751 for international participants a few minutes before the scheduled start and ask for the Analysts International conference call moderated by Company President and CEO, Jeff Baker. 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 11:30 a.m. CT on October 26, 2006 until 10:59 p.m. CT on November 2, 2006, by calling 1-877-519-4471 and using access code 7959349. 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. In business since 1966, the company has sales and customer support offices in the United States and Canada. Lines of business include Full Service Staffing, which provides high demand resources for supporting a client's IT staffing needs; Solutions Services, which provides business solutions and network infrastructure services; Managed IT Services and Government Solutions. 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.

                    Analysts International Corporation
                  Consolidated Statements of Operations
                                (unaudited)

                                 Three Months Ended     Nine Months Ended
                                --------------------  --------------------
(in thousands except per share  September   October   September   October
 amounts)                       30, 2006    1, 2005   30, 2006    1, 2005

Revenue:
  Provided directly             $  65,655  $  65,042  $ 196,969  $ 197,359
  Provided through subsuppliers    12,470      7,757     40,194     22,874
  Product sales                     7,355      5,445     23,064     16,214
                                ---------  ---------  ---------  ---------
    Total revenue                  85,480     78,244    260,227    236,447

Expenses:
  Salaries, contracted services
   and direct charges              64,333     59,261    195,443    177,220
  Cost of product sales             6,450      4,820     20,202     14,731
  Selling, administrative and
   other operating costs           14,876     16,031     44,200     47,395
  Merger related costs                (83)     1,225       (327)     2,113
  Restructuring and other
   severance related costs            (39)     3,161        (54)     3,904
  Asset write-off                      --      1,817         --      1,817
  Goodwill impairment                  --      7,050         --      7,050
  Amortization of intangible
   assets                             266        342        786        729
                                ---------  ---------  ---------  ---------

Operating loss                       (323)   (15,463)       (23)   (18,512)
Non-operating income                    5          4        114         26
Interest expense                      194        125        586        179
                                ---------  ---------  ---------  ---------

Loss before income taxes             (512)   (15,584)      (495)   (18,665)
Income tax expense                     10         --         31         --
                                ---------  ---------  ---------  ---------
Net loss                        $    (522) $ (15,584) $    (526) $ (18,665)
                                =========  =========  =========  =========

Per common share:
  Basic loss                    $    (.02) $    (.63) $    (.02) $    (.76)
                                =========  =========  =========  =========
  Diluted loss                  $    (.02) $    (.63) $    (.02) $    (.76)
                                =========  =========  =========  =========

Average common shares
 outstanding                       24,662     24,565     24,631     24,462
Average common and common
 equivalent shares outstanding     24,662     24,565     24,631     24,462


Analysts International Corporation
                        Consolidated Balance Sheets

                                                 September 30, December 31,
                                                     2006         2005
(in thousands)                                   (unaudited)
                                                 ------------ ------------
Assets

Current assets:
  Cash and cash equivalents                      $        143 $         64
  Accounts receivable, less allowance for
   doubtful accounts                                   71,566       66,968
  Other current assets                                  2,347        2,383
                                                 ------------ ------------
    Total current assets                               74,056       69,415

Property and equipment, net                             3,413        4,056
Intangible assets                                      11,512       12,298
Goodwill                                               11,799       11,799
Other assets                                            3,628        4,436
                                                 ------------ ------------
    Total assets                                 $    104,408 $    102,004
                                                 ============ ============

Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                               $     23,295 $     24,581
  Salaries and vacations                                5,679        8,260
  Line of credit                                       11,422        5,000
  Deferred revenue                                      1,078        1,645
  Restructuring accrual, current portion                  535          971
  Self-insured health care reserves and other
   amounts                                              3,591        2,242
  Deferred compensation                                   172          534
                                                 ------------ ------------
    Total current liabilities                          45,772       43,233

Non-current liabilities:
  Deferred compensation                                 2,274        1,878
  Restructuring accrual                                   203          581

Shareholders' equity                                   56,159       56,312
                                                 ------------ ------------
                                                 $    104,408 $    102,004
                                                 ============ ============



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

                                 Three Months Ended     Nine Months Ended
                                --------------------  --------------------
                                  September   October   September   October
                                     30,         1,        30,         1,
                                    2006        2005      2006        2005

Net loss as reported            $    (522) $ (15,584) $    (526) $ (18,665)

Plus:
Depreciation                          629        699      1,809      2,084
Amortization                          266        342        786        729
Interest expense                      194        125        586        179
Merger related costs                  (83)     1,225       (327)     2,113
Restructuring and severance
 related costs                        (39)     3,161        (54)     3,904
Asset write-off                        --      1,817         --      1,817
Goodwill impairment                    --      7,050         --      7,050
Income tax expense                     10         --         31         --

Less:
Interest income                        (5)        (4)       (15)       (26)
                                ---------  ---------  ---------  ---------

  Adjusted EBITDA*              $     450  $  (1,169) $   2,290  $    (815)
                                =========  =========  =========  =========
*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. We have excluded the special costs associated with our attempted merger with Computer Horizons, our restructuring and severance-related costs, asset write-off, and goodwill impairment to provide 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:
    Jeff Baker
    President and CEO
    Analysts International
    Phone: 952-835-5900
    Email Contact

    Bill Bartkowski
    Partner
    MeritViewPartners
    Phone: 612-605-8616
    Email Contact