|
| |||||||||||||||
Analysts International Corporation Reports 2008 Second Quarter Financial Results Company's Business Transformation Plan Continues to Progress MINNEAPOLIS, MN--(MARKET WIRE)--Jul 29, 2008 -- Analysts International Corporation (ANLY - News), a diversified
IT services company, today announced its financial
results for the 2008 second quarter which ended on June
28, 2008.
-- Revenue totaled $82.0 million for the second quarter of 2008, compared
to $89.2 million for the second quarter of 2007. This decrease in revenue
is largely the result of lower headcount in our staffing business and a
decrease in product sales as the Company transitions to providing clients
with higher-value services.
-- Analysts International Corporation reported a net loss of $1.0
million, or $0.04 per diluted share, for the second quarter of 2008,
compared to a net loss of $0.7 million, or $0.03 per diluted share, for the
second quarter of 2007. The reported net losses above included a $0.9
million, or $0.04 per diluted share, and a $0.6 million, or $0.02 per
diluted share, charge for restructuring, severance and other consulting
costs in the second quarters of 2008 and 2007, respectively.
-- Gross margin was $13.0 million, or 15.8 percent of revenue, for the
second quarter of 2008, compared to $14.1 million, or 15.8 percent of
revenue, in the second quarter of 2007. The decrease in gross margin
dollars corresponds with the second quarter year-over-year decrease in
revenue.
-- Selling, administrative and other expenses declined by $1.2 million in
the second quarter of 2008 when compared to the second quarter of 2007,
reflecting the Company's success in implementing its strategy and reducing
costs in certain areas.
-- For the six months ended June 28, 2008, the Company reported revenue
of $164.8 million compared to $178.4 million for the comparable period a
year ago. The net loss for the first half of 2008 was $2.0 million, or
$0.08 per diluted share, compared to a net loss of $2.8 million, or $0.11
per diluted share, for the first half of 2007. The reported net losses
above included a $2.8 million, or $0.11 per diluted share, and a $1.8
million, or $0.07 per diluted share, charge for restructuring, severance
and other consulting charges, in the second quarters of 2008 and 2007,
respectively.
-- Gross margin was $27.6 million, or 16.7% of revenue, in the first half
of 2008 compared to $28.7 million, or 16.1% of revenue in the first half of
2007. The decrease in gross margin dollars corresponds with the year-over-
year decrease in revenue.
-- Selling, administrative and other expenses declined by $2.7 million
for the six months ended June 28, 2008, when compared to the first half of
2007, reflecting the Company's success in implementing its strategy and
reducing costs in certain areas.
"We continue to make steady progress in transforming AIC into a value-driven IT services company that delivers greater value to its shareholders," said Elmer Baldwin, President and CEO. "Our primary focus for the first half of 2008 has been on aligning our cost structure with the business, making the investments required to increase our mix of higher-margin services and exiting our lowest-margin and non-core lines of business. We expect these changes to result in improved performance and remain on track to achieve sustained profitability in the second half of 2008. "Although we will continue to look for opportunities to improve our cost structure, the majority of the restructuring is behind us," continued Baldwin. "Going forward, we will focus on marketing our services, hiring best-in-class people and delivering on the needs and expectations of our clients. AIC's new business activity remains steady and the number of opportunities to provide premium staffing, high value-add solutions, project-oriented services and managed teams to our clients continues to increase," said Baldwin. Analysts will host a conference call today at 9:00 am CT to discuss second quarter 2008 results. Interested parties may access the call by dialing 1-866-290-0882, or 1-913-312-1524 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 July 29, 2008 to 10:59 pm CT on August 5, 2008, by calling 1-866-245-6755, or 1-416-915-1035 for international callers, and using access code 154287. About Analysts International Corporation Headquartered in Minneapolis, MN, Analysts International Corporation (ANLY - News) 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; (ii) expectation that the Company will not require additional, significant restructuring; (iii) continued demand for the Company's services; and (iv) expected improvement in financial results in the second half of fiscal year 2008, including achievement of 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) the Company requires further cost reductions that result in additional restructuring charges for severance-related payments, real-estate consolidation, capital expenditures for implementation or other associated costs; (ii) the status of the economy in general and its potential effect on client demand for IT services if the economy deteriorates; (iii) lack of success with or inadvisability of efforts to achieve growth in higher-value, higher margin business, including geographic expansion of our solutions service offerings or expansion of more desirable areas of our staffing business; (iv) 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 (v) 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.
Analysts International Corporation
Consolidated Statements of Operations
(unaudited)
Three Months Ended Six Months Ended
------------------ ------------------
(in thousands except per share June 28, June 30, June 28, June 30,
amounts) 2008 2007 2008 2007
Professional services revenue:
Provided directly $ 58,162 $ 60,386 $118,902 $123,337
Provided through subsuppliers 14,230 14,820 28,326 30,942
Product sales 9,598 14,043 17,565 24,077
-------- -------- -------- --------
Total revenue 81,990 89,249 164,793 178,356
Cost of goods and services sold:
Cost of goods and services sold
provided directly 46,491 48,115 94,108 98,436
Cost of goods and services sold
provided through subsuppliers 13,730 14,200 27,304 29,700
Cost of product sales 8,793 12,790 15,783 21,495
-------- -------- -------- --------
Total cost of goods and
services sold 69,014 75,105 137,195 149,631
Gross margin 12,976 14,144 27,598 28,725
Expenses:
Selling, administrative and other
operating costs 12,940 14,104 26,629 29,373
Restructuring, severance, and
other related costs 729 441 2,368 1,422
Amortization of intangible assets 279 267 558 533
-------- -------- -------- --------
Operating loss (972) (668) (1,957) (2,603)
Non-operating income 36 17 70 24
Interest expense (43) (65) (135) (143)
-------- -------- -------- --------
Loss before income taxes (979) (716) (2,022) (2,722)
Income tax expense 5 7 9 28
-------- -------- -------- --------
Net loss $ (984) $ (723) $ (2,031) $ (2,750)
======== ======== ======== ========
Per common share:
Basic loss $ (0.04) $ (0.03) $ (0.08) $ (0.11)
-------- -------- -------- --------
Diluted loss $ (0.04) $ (0.03) $ (0.08) $ (0.11)
-------- -------- -------- --------
Average common shares outstanding 24,913 24,943 24,913 24,847
Average common and common
equivalent shares outstanding 24,913 24,943 24,913 24,847
Analysts International Corporation
Consolidated Balance Sheets
June 28,
(in thousands) 2008 December 29,
(unaudited) 2007
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 107 $ 91
Accounts receivable, less allowance for
doubtful accounts 58,972 66,074
Other current assets 1,340 2,101
------------ ------------
Total current assets 60,419 68,266
Property and equipment, net 2,500 2,711
Other assets 13,518 14,294
------------ ------------
Total assets $ 76,437 $ 85,271
============ ============
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 24,753 $ 27,780
Salaries and vacations 6,851 6,885
Line of credit 1,324 1,587
Deferred revenue 1,288 1,943
Restructuring accrual, current portion 760 1,900
Self-insured health care reserves and other
amounts 1,036 1,516
Deferred compensation 550 1,868
------------ ------------
Total current liabilities 36,562 43,479
Non-current liabilities:
Deferred compensation 921 927
Restructuring accrual 160 138
Other liabilities 530 692
Shareholders’ equity 38,264 40,035
------------ ------------
$ 76,437 $ 85,271
============ ============
Analysts International Corporation
Reconciliation of non-GAAP Financial Measures
(in thousands)
Three Months Ended Six Months Ended
------------------ ----------------
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
Net loss as reported $ (984) $ (723) $ (2,031) $ (2,750)
Plus:
Restructuring severance and
other related costs 729 441 2,368 1,422
Other consulting costs 180 159 406 382
Net (loss) income before
special charges (75) (123) 743 (946)
Stock-based compensation
expense 157 29 260 778
Depreciation 389 416 803 892
Amortization 279 267 558 533
Net interest expense 7 48 65 119
Income tax expense 5 7 9 28
--------- --------- --------- ---------
Adjusted EBITDA* $ 762 $ 644 $ 2,438 $ 1,404
--------- --------- --------- ---------
*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 expenses associated with stock
based compensation, severance payments, restructure charges and
adjustments, and the costs associated with outside consultants engaged to
assist with special strategic initiatives and consideration of an
unsolicited acquisition proposal. 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: Media Contacts:
Ruth Pachman
Andrea Calise
Kekst and Company
(212) 521-4891
(212) 521-4845
Source: Analysts International Corporation
|  | ||||||||||||||
