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Analysts International Corp. Reports Operating Results (10-K)

February 23, 2012 | About:

Analysts International Corp. (ANLY) filed Annual Report for the period ended 2011-12-31.

Analysts Intl has a market cap of $33 million; its shares were traded at around $6.81 with a P/E ratio of 8.7 and P/S ratio of 0.3.

Highlight of Business Operations:

On March 3, 2010, we sold certain customer contracts, property and equipment and sublet a facility lease. In consideration for the assets sold and the liabilities transferred, the Company received $0.2 million in cash. The Company recorded a loss on the sale of approximately $50,000 which is included within Selling, administrative and other operating costs ("SG&A") in our Consolidated Statement of Operations. For the preceding 12 months before the sale date, the customer contracts generated revenues of approximately $3.2 million and had an unfavorable contribution margin of approximately $0.7 million.

SG&A costs include management and administrative salaries, salaries and commissions paid to account executives and recruiters, benefits, location costs and other administrative costs. This category of costs decreased approximately $2.3 million in fiscal 2011 from fiscal 2010 and represented 20.4% of revenue in fiscal 2011 as compared to 23.0% in fiscal 2010. In fiscal 2011, SG&A expenses declined as a result of previously implemented general expense reductions ($1.4 million), lower employee benefit costs ($0.9 million) and personnel and related cost reductions ($0.1 million), which was partially offset by higher sales and recruiting costs ($0.5 million). In addition, during fiscal 2011, we required the

SG&A costs include management and administrative salaries and benefits, commissions paid to sales representatives and recruiters, location costs and other administrative costs. This category of costs decreased $13.3 million from fiscal 2009 and represented 23.0% of total revenue for fiscal 2010 compared to 26.5% for fiscal 2009. In fiscal 2010, SG&A expenses decreased $7.2 million as a result of the asset sales, $3.2 million from the impact of personnel and related cost reductions and $2.9 million from the implementation of non-personnel cost reductions.

Our total current assets increased approximately $1.2 million in fiscal 2011 compared to fiscal 2010 as a result of higher cash and cash equivalents and accounts receivable offset slightly by a decrease in our prepaid expenses and other current assets. Our accounts receivable increased 3.4% due to a 6.9% increase in our fiscal 2011 fourth quarter revenues over the fourth quarter of fiscal 2010, which was offset by improved collection experience. Our days sales outstanding at the end of fiscal 2011 was 61 compared to 63 at the end of fiscal 2010. Our prepaid expenses and other current assets decreased primarily from collecting approximately $0.1 million in contingent consideration during fiscal 2011 related to the sale of the VAR assets in fiscal 2009.

The Amended Credit Facility requires us to meet certain levels of year-to-date earnings before taxes. For fiscal 2011, we were required to exceed a minimum trailing twelve months loss before taxes of $0.8 million and for each reporting period thereafter we are required to exceed a minimum trailing twelve months earnings before taxes of $0.25 million. Additionally, the Amended Credit Facility limit on our annual capital expenditures was $2.5 million in fiscal 2011 and $2.0 million for each fiscal year thereafter. Beginning in fiscal 2012, we will also be required to maintain a minimum excess borrowing base availability of not less than $3.0 million. The Amended Credit Facility contains customary affirmative covenants, including covenants regarding annual, quarterly and projected financial reporting requirements, collateral and insurance maintenance, and compliance with applicable laws and regulations. Further, the facility contains customary negative covenants limiting our ability to grant liens, incur indebtedness, make investments, repurchase our stock, create new subsidiaries, sell assets or engage in any change of control transaction without the consent of Wells Fargo.

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