-----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, RhSPZYYyS7N7ZjIJYU/6GYDvw0WJ9j/FKQxhcbi0qXT4JSailTritIkn6Z1hCC8N 7OMWw6SdHo6xR5OHGqPp8A== 0000912057-96-025215.txt : 19961111 0000912057-96-025215.hdr.sgml : 19961111 ACCESSION NUMBER: 0000912057-96-025215 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 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: 96657038 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 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ----------- Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 ----------- For the quarter ended: Commission file number: September 30, 1996 0-4090 ----------- ANALYSTS INTERNATIONAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Minnesota 41-0905408 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.) 7615 Metro Boulevard Minneapolis, MN 55439 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) Telephone Number: (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 October 30, 1996, 14,676,944 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 September 30, 1996 (Unaudited) and June 30, 1996 1 Condensed Consolidated Statements of Income Three months ended September 30, 1996 and 1995 (Unaudited) 2 Condensed Consolidated Statements of Cash Flows Three months ended September 30, 1996 and 1995 (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
September 30, June 30, (IN THOUSANDS) 1996 1996 ------------ ------------ (Unaudited) Current assets: Cash and cash equivalents $12,918 $17,018 Accounts receivable, less allowance for doubtful accounts 54,600 49,494 Other current assets 2,540 2,567 ------ ------ Total current assets 70,058 69,079 Property and equipment, net 5,867 5,715 Other assets 10,808 6,651 ------ ------ $86,733 $81,445 ------ ------ ------ ------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $11,380 $11,049 Dividend payable 1,319 1,099 Salaries and vacations 6,976 7,524 Other, primarily self-insured health care reserves 1,744 1,677 Income taxes payable 2,856 382 ------ ------ Total current liabilities 24,275 21,731 Long-term liabilities 6,176 5,996 Shareholders' equity (Note 2) 56,282 53,718 ------ ------ $86,733 $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 EXCEPT PER SHARE AMOUNTS) September 30 ---------------------------- 1996 1995 ---- ---- Revenues $98,022 $73,071 Expenses: Salaries, contracted services and direct charges 75,653 55,312 Selling, administrative and other operating costs 16,120 13,373 ------ ------ Total expenses 91,773 68,685 ------ ------ Operating income 6,249 4,386 Other income 254 258 ------ ------ Income before income taxes 6,503 4,644 Income taxes 2,635 1,835 ------ ------ Net income $ 3,868 $ 2,809 ------ ------ ------ ------ PER COMMON SHARE:* Net income $ .26 $ .19 ------ ------ ------ ------ Dividends paid $ .075 $ .065 ------ ------ ------ ------ Average common and common equivalent shares outstanding* 14,897,000 14,760,000 ---------- ---------- ---------- ---------- *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) Three Months Ended September 30 ---------------------------- (DOLLARS IN THOUSANDS) 1996 1995 ---- ---- Net cash provided by operating activities $ 2,807 $ 4,156 Cash flows from investing activities: Property and equipment additions (580) (764) Increase in annuities and cash surrender values (90) (72) Payments for acquisitions (5,153) - ------- ------- Net cash used in investing activities (5,823) (836) Cash flows from financing activities: Cash dividends (1,099) (943) Proceeds from exercise of stock options 15 49 ------- ------- Net cash used in financing activities (1,084) (894) Net change in cash and equivalents (4,100) 2,426 Cash and equivalents at beginning of period 17,018 12,615 ------- ------- Cash and equivalents at end of period $ 12,918 $ 15,041 ------- ------- ------- ------- 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 September 30, 1996, the condensed consolidated statements of income for the three month periods ended September 30, 1996 and 1995 and the condensed consolidated statements of cash flows for the three 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 September 30, 1996 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 Three Months Ended September 30, 1996 ------------------ (In thousands) Balance at beginning of period $53,718 Cash dividends declared: August 15, 1996 at $.09 per share (1,319) Proceeds upon exercise of stock options 15 Net income 3,868 ------ Balance at end of period $56,282 ------ ------ 4 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Ended September 30, 1996 and 1995 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 3.2% reduction in the Company's working capital and the reduction in the current ratio from 3.18 to 2.89 are 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 August 15, 1996 the Board of Directors increased the Company's regular quarterly cash dividend to $.09 per share and declared the dividend payable November 15, 1996 to shareholders of record as of October 31, 1996. The previous dividend rate was $.075 per share. 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 quarter ended September 30, 1996 were $98.0 million, an increase of 34.1% over the same period a year ago. This revenue increase resulted primarily from increases in billable hours of service rendered to clients and approximately $20.0 million of pass-through billings on the Company's two major outsourcing contracts which compares with $13.0 million for the same period 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 4,050 at September 30, 1996, compared to 3,350 at September 30, 1995, an increase of 20.9%. 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 77.2% of revenues for the three months ended September 30, 1996 compared to 75.7% for the same period a year ago. By comparison, these costs were 77.4% of revenues for the fourth quarter of fiscal 1996. This category of expense also includes the fees for the contracted services of subcontractors who are necessary to support the Company with the major outsourcing contracts referred to above and these fees typically are higher per hour than the labor costs for its own employees. 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. 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 16.4% of revenues for the three months ended September 30, 1996 compared to 18.3% for the same period a year ago. 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 three months ended September 30, 1996. 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 November 8, 1996 By /s/ Gerald M. McGrath ----------------- ------------------------------------- Gerald M. McGrath Treasurer and Chief Financial Officer Date November 8, 1996 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 27 Financial Data Schedule * Page numbers in the sequential numbering system of the manually signed original report. EX-11 2 EXHIBIT 11 EXHIBIT NO. 11 ANALYSTS INTERNATIONAL CORPORATION COMPUTATION OF NET INCOME PER SHARE Three Months Ended September 30 (IN THOUSANDS EXCEPT ----------------------- PER SHARE AMOUNTS) 1996 1995 ---- ---- PRIMARY: Weighted average number of common shares outstanding 14,652 14,528 Dilutive stock options after application of treasury stock method 245 232 ------ ------ Weighted average number of common and common equivalent shares outstanding 14,897 14,760 ------ ------ ------ ------ Net income $ 3,868 $ 2,809 ------ ------ ------ ------ Per share amount $ .26 $ .19 ------ ------ ------ ------ FULLY DILUTED: Weighted average number of common shares outstanding 14,652 14,528 Dilutive stock options based on the treasury stock method using the end of the period market price, if higher than average market price 323 268 ------ ------ Weighted average number of common and common equivalent shares outstanding 14,975 14,796 ------ ------ ------ ------ Net income $ 3,868 $ 2,809 ------ ------ ------ ------ Per share amount $ .26 $ .19 ------ ------ ------ ------ Adjusted to reflect the 2 for 1 common stock split in the form of a stock dividend distributed September 30, 1996. EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 12,918 0 55,053 453 0 70,058 16,198 10,331 86,733 24,275 6,176 0 0 1,465 54,817 86,733 98,022 98,022 75,653 75,653 16,120 30 0 6,503 2,635 3,868 0 0 0 3,868 .26 .26
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