8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):  April 22, 2008

Analysts International Corporation
(Exact name of registrant as specified in its charter)
Minnesota	0-4090		41-0905408
(State or othis jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification Number)
3601 West 76th Street, Minneapolis, Minnesota		55435-3000
(Address for principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:   (952) 835-5900

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02                      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c)On April 22, 2008, Analysts International Corporation (the “Company”) announced that Walter “Mic” Michels (“Michels”) has been named interim Chief Financial Officer and will also serve as Assistant Treasurer during the interim period.  Mr. Michels has served as the Company’s Controller since 2004.  The Company’s press release issued on April 22, 2008 contains more specific biographical information concerning Mr. Michels.

In connection with this appointment, the Company has agreed to pay Mr. Michels an annual salary of $175,000 while serving as interim Chief Financial Officer and retention bonuses of $15,000 and $10,000, respectively, if Mr. Michels remained or remains employed with the Company through the first and second quarters of fiscal year 2008.  In addition, if the Company involuntarily terminates Mr. Michels’ employment for reasons other than cause (as the term “cause” is defined in the Letter Agreement between the Company and Mr. Michels), Mr. Michels will receive a severance payment equivalent to nine months of his salary in effect at the time of termination, provided he remains available to provide services for up to 60 days for transition of his duties.  Mr. Michels is also eligible for severance equivalent to three months’ salary if he terminates his employment voluntarily under certain conditions outlined further in the Letter Agreement after appointment of a Chief Financial Officer.

The full text of the press release issued in connection with the announcement and the letter agreement between the Company and Mr. Michels are set forth in Exhibits 99.1 and 99.2 and are attached to this Current Report.  The portion of the press release pertaining to Mr. Michels’ appointment only is incorporated by reference as if set forth herein.  The full text of the letter agreement between the Company and Mr. Michels is incorporated by reference as if fully set forth herein.

Item 9.01                      Financial Statements and Exhibits.

           (c) Exhibits.

Exhibit Number	Description
99.1	Press Release entitled “Analysts International Corporation Reports 2008 First Quarter Financial Results, Company Also Names Walter Michels as Interim CFO” issued by Analysts International Corporation on April 22, 2008.
99.2	Letter Agreement between Analysts International Corporation and Walter Michels dated February 12, 2008.

SIGNATURE

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 hereunto duly authorized.

Date:	April 22, 2008	ANALYSTS INTERNATIONAL CORPORATION
		/s/ Robert E. Woods
		Robert E. Woods
		Senior Vice President, General Counsel and Secretary

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release entitled “Analysts International Corporation Reports 2008 First Quarter Financial Results, Company Also Names Walter Michels as Interim CFO” issued by Analysts International Corporation on April 22, 2008.
99.2	Letter Agreement between Analysts International Corporation and Walter Michels dated February 12, 2008.

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EX-99.1

 EXHIBIT 99.1

Media Contacts:

Ruth Pachman

Andrea Calise

Kekst and Company

(212) 521-4891 / (212) 521-4845

Analysts International Corporation Reports 2008 First Quarter

Financial Results

Company Also Names Walter Michels as Interim CFO

MINNEAPOLIS — April 22, 2008 — Analysts International Corporation (NASDAQ: ANLY), a diversified IT services company, today reported its first quarter results for 2008.

§   Revenues totaled $82.8 million for the first quarter of 2008, compared to $89.1 million for the comparable quarter a year ago. This decrease in revenue is largely the result of lower headcount in our staffing business and the Company transitioning to provide clients with higher-margin services.

§   Including special charges of $1.9 million, Analysts International Corporation reported a net loss of $1.0 million, or $0.04 per diluted share for the first quarter of 2008, compared to a net loss of $2.0 million or $0.08 per diluted share for the first quarter of 2007.  These special charges consisted primarily of lease restructurings, severance payments and other consulting costs associated with executing on the Company’s new strategic plan in addition to advisory costs incurred in connection with the unsolicited proposal received from Koosharem Corporation.

§   Excluding special charges, the Company earned net income of $818,000 in the first quarter of 2008, compared to a net loss of $823,000 in the comparable quarter a year ago.

§   Gross profit increased by $41,000 from first quarter 2007 to first quarter 2008, despite a $6.3 million revenue decrease in the same period of time. Our gross margin for the first quarter 2008 was 17.7% of revenue, a 1.3% improvement when compared to the year-ago quarter.

§   Selling, administrative and other expenses declined by $1.6 million.

“In December 2007, we began the work outlined in our strategic plan to transform AIC into a more profitable, value-driven IT services company, and I am pleased with our initial progress,” said Elmer Baldwin, President and CEO. “In the first quarter, we made important strides towards streamlining our back-office and corporate support functions in addition to building a high-caliber leadership team to drive our transformation. We also began executing our strategy to focus on higher-margin opportunities, while continuing to meet the current staffing needs of our clients, and are pleased by the positive market reaction to our higher value service offerings.”

“While our first quarter results are encouraging, we have considerable work ahead of us,” added Baldwin. “Achieving sustained profitability will require continued focus, discipline and a commitment to delivering results at all levels of AIC.”

The Company also announced that Walter “Mic” Michels, the company’s Controller and Assistant Treasurer, has been appointed interim Chief Financial Officer. The Company continues to seek a permanent replacement for its former CFO David Steichen, who left AIC in March 2008 as the result of a management restructuring.

Michels, 41, joined AIC in July 2004. Prior to AIC, he served as Chief Financial Officer and General Counsel for Wadsworth Companies, Inc., a provider of home and business improvement contracting services. Michels has also served as an auditor at Deloitte & Touche. In addition to serving as interim CFO, Michels will continue to serve as Controller and Assistant Treasurer.

Analysts will host a conference call today at 9:00 am CT to discuss first quarter 2008 results. Interested parties may access the call by dialing 1-800-762-8779, or 1-480-629-9029 for international participants, and asking for the Analysts International conference call. Live audio of the conference 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 12:00 pm CT on April 22, 2008 to 10:59 pm CT on April 29, 2008, by calling 1-800-406-7325, or 1-303-590-3030 for international callers, and using access code 3871394.

About Analysts International Corporation

Headquartered in Minneapolis, MN, Analysts International Corporation (AIC) (NASDAQ: ANLY) is a diversified technology services company. With sales and customer support offices in the United States and Canada, AIC provides information technology solutions and staffing services, including: Technology Solutions, which provides network services, infrastructure, application integration, IP telephony and hardware solutions to the middle market; Professional Services, which provides highly-skilled project managers, business analysts, developers and other IT consultants to assist its clients with strategic change; and IT Resources Staffing, which provides best value, best response supply of resources to high-volume clients. 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 the Press Release for the conference call by the Company, or its President and CEO, Elmer Baldwin, regarding:  (i) transformation of the Company’s business to higher value, higher-margin services; and (ii) achieving sustained profitability in the second half of fiscal year 2008 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 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) lack of success with the Company’s restructuring and new strategic plan, including risk associated with not completing the Company’s restructuring by the second quarter of 2008 or the occurrence of additional costs for severance-related payments, real-estate consolidation, capital expenditures for implementing the plan or other transition costs associated with the restructuring; (ii) lack of success in or advisability of efforts to capture growth opportunities, including geographic expansion of our solutions service offerings or expansion of more desirable areas of our staffing business; (iii) the risk that we will be unable to exit non-core or less desirable areas of the business in a timely manner or on favorable terms; (iv) market conditions in the IT services industry, including intense competition for qualified billable technical personnel at competitive rates, strong pricing pressures from many of our largest clients; (v) lack of success at reducing employee-related costs without unduly disrupting the operations of our business; (vi) significant rapid growth or loss in our business or significant lengthening of payment terms with a major client that creates a need for additional working capital; and (vii) and other economic, business, market, financial, competitive and/or regulatory factors affecting the Company’s business generally, including those set forth in the Company’s filings with the SEC, including its Annual Report on Form 10-K for its most recent 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.

(Financials follow)

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Analysts International Corporation

Consolidated Statements of Operations

(unaudited)

	Three Months Ended
(in thousands except per share amounts)	March 29, 2008			March 31, 2007
Professional services revenue:
Provided directly	$	60,740		$	62,951
Provided through sub suppliers		14,096			16,122
Product sales		7,967			10,034
Total revenue		82,803			89,107
Cost of goods and services sold:
Cost of goods and services sold provided directly		47,617			50,321
Cost of goods and services sold provided through   sub suppliers		13,574			15,500
Cost of product sales		6,990			8,705
Total cost of goods and services sold		68,181			74,526
Gross Margin		14,622			14,581
Expenses:
Selling, administrative and other operating costs		13,689			15,269
Restructuring, severance, and other related costs		1,639			981
Amortization of intangible assets		279			266
Operating loss		(985	)		(1,935	)
Non-operating income		34			7
Interest expense		(92	)		(78	)
Loss before income taxes		(1,043	)		(2,006	)
Income tax expense		4			21
Net loss	$	(1,047	)	$	(2,027	)
Per common share:
Basic loss	$	(.04	)	$	(.08	)
Diluted loss	$	(.04	)	$	(.08	)
Average common shares outstanding		24,913			24,751
Average common and common equivalent shares outstanding		24,913			24,751

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Analysts International Corporation

Consolidated Balance Sheets

(in thousands)	March 29, 2008 (unaudited)		December 29, 2007
Assets
Current assets:
Cash and cash equivalents	$	141	$	91
Accounts receivable, less allowance for doubtful accounts		59,509		66,074
Other current assets		2,054		2,101
Total current assets		61,704		68,266
Property and equipment, net		2,465		2,711
Other assets		13,891		14,294
Total assets	$	78,060	$	85,271
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	25,373	$	27,780
Salaries and vacations		4,329		6,885
Line of credit		3,527		1,587
Deferred revenue		1,905		1,943
Restructuring accrual, current portion		463		1,900
Self-insured health care reserves and other amounts		815		1,516
Deferred compensation		857		1,868
Total current liabilities		37,269		43,479
Non-current liabilities:
Deferred compensation		908		927
Restructuring accrual		201		138
Other Liabilities		591		692
Shareholders’ equity		39,091		40,035
	$	78,060	$	85,271

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Analysts International Corporation

Reconciliation of non-GAAP Financial Measures

(in thousands)

	Three Months Ended
	March 29, 2008			March 31, 2007
Net loss as reported	$	(1,047	)	$	(2,027	)
Plus:
Restructuring severance and other related costs		1,639			981
Other consulting costs		226			223
Income (loss) before severance related costs		818			(823	)
Depreciation		414			476
Amortization		279			266
Net interest expense		58			71
Income tax expense		4			21
Adjusted EBITDA*	$	1,573		$	11

*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 2008 and 2007 periods, we have excluded costs associated with severance payments, restructure charges and adjustments, and the costs associated with outside consultants engaged to assist with special strategic initiatives and consideration of the unsolicited proposal from Koosharem Corporation. 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.

# # #

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EX-99.2

EXHIBIT 99.2

February 12, 2008

Walter “Mic” Michels

Re:  Incentive Letter Agreement

Dear Mic:

I want to express my appreciation for your continued loyalty and effort.  As you know, Analysts International Corporation (“Analysts” or “Company”) has begun a search for a new Chief Financial Officer (“CFO”).  Analysts recognizes this unavoidably impacts your feeling of security given the nature of your at-will employment so we want to provide you with assurance to enable you to perform your job to the best of your ability and with the utmost dedication.  Therefore, the purpose of this Incentive Letter Agreement (“Agreement”) is to alleviate concerns you may have about job stability in the short term and provide you certain assurances during this transition period.  Toward that end, Analysts is offering you the following commitments:

1.   Stay Bonus.

In order to provide you with incentive to stay with Analysts through the end of the second quarter of 2008 (at a minimum), Analysts will provide you with “stay bonuses” as follows:  If you stay employed the entire fiscal first quarter of 2008, you will be eligible to receive a “stay bonus” of $15,000; and if you stay employed the entire fiscal second quarter of 2008, you will be eligible to receive an additional “stay bonus” of $10,000.

Stay bonus payments are conditioned upon you (a) providing your full energy, cooperation and assistance to Analysts in the discharge of your duties and obligations as set forth herein, or otherwise required by law, and (b) complying with all existing Company policies, rules and conditions of employment.  Whether or not you satisfactorily meet the foregoing conditions will be determined in the sole reasonable judgment of the Chief Executive Officer (“CEO”).

2.   Severance.

Analysts is prepared to offer you the following severance commitments in the event your employment is terminated:

A.   Involuntary Termination.

In the event Analysts terminates your employment for reasons other than “Cause” (as defined below), you will receive severance equivalent to nine (9) months salary then in effect on the date of termination (less required deductions and payable in a lump sum) provided you remain available to work through a reasonable transition period not to exceed sixty (60) days.

B.   Voluntary Termination.

As before, you may terminate your at-will employment at any time.  However, you will only be eligible for severance upon a voluntary termination under the following conditions related to the appointment of a new CFO.  Upon the new CFO’s appointment, you must continue to work a 90-day period.  Beginning on the 91st day and continuing through the 120th day, you may give notice and voluntarily terminate your employment.  If you elect to do so, you will receive severance equivalent to three (3) months salary then in effect on the date of termination (less required deductions and payable in a lump sum) provided you remain available to work through a reasonable transition period determined by the new CFO, but not to exceed ninety (90) days from the date you give notice.

Severance payments are conditioned upon you (a) providing your full energy, cooperation and assistance to the Company in the discharge of your duties and obligations as set forth herein, or otherwise required by law, and (b) complying with all existing Company policies, rules and conditions of employment.  Whether or not you satisfactorily meet the foregoing conditions will be determined in the sole reasonable judgment of the Chief Executive Officer.

Unless mutually terminated beforehand, the aforementioned severance commitments will remain in effect for a period of not less than one year after the appointment of a new CFO.  After such time, Analysts may terminate this Agreement upon thirty (30) days notice to you.

Although we anticipate a mutually rewarding employment relationship with you, Analysts may terminate your employment immediately at any time for “Cause” which will nullify all severance obligations.  For purposes of this Agreement, “Cause” shall mean (i) your substantial failure or neglect, or refusal to perform, the duties and responsibilities of your position and/or the reasonable direction of the Board of Directors;  (ii) the commission by you of any willful, intentional or wrongful act that has the effect of materially injuring the reputation, business or performance of the Company; (iii) your conviction of, or your guilty or nolo contendere plea with respect to, any crime punishable as a felony; (iv)  your conviction of, or your guilty or nolo contendere plea with respect to, any crime involving moral turpitude; or (v) any bar against you from serving as a director, officer or executive of any firm the securities of which are publicly-traded.

3.   Title, Responsibilities, and Salary.

You will continue to serve as a full-time employee in the position of “Controller” and maintain your current duties and responsibilities.

Effective upon your execution of this Agreement and in recognition of your past efforts and performance, and your assumption of additional duties as reasonably assigned to you following the execution of this Agreement, you will also assume the title of “Assistant Treasurer.”

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Your base salary will remain $150,000.  However, in the event you serve as interim CFO, your base salary will increase to $175,000 while you serve as interim CFO.  Your base salary will revert to $150,000 upon the appointment of a new CFO and any future adjustments to your compensation will be at the discretion of the new CFO and subject to CEO approval.

This Agreement does not alter the at-will nature of your employment and should not be construed as a guarantee or contract of employment for any particular duration of time.  Once executed, this Agreement can only be amended in writing, signed by both parties.  All existing obligations, terms and conditions of your employment to which you are already subject, including, without limitation, all fiduciary, non-disclosure and loyalty duties, and all confidentiality and non-solicitation obligations, will continue in full force and effect.  All amounts paid to you under this Agreement will be paid in accordance with existing payroll policies, and will be subject to customary withholding obligations and other deductions.

If you are in agreement with the foregoing, please sign two copies of this letter and return one of them to me.

Sincerely,

Elmer Baldwin

Chief Executive Officer

Analysts International Corp.

ACKNOWLEDGED AND AGREED:

______________________________

Walter Michels

______________________________

Date

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