Science & Technology
Science and Technology
Science and Technology
Thu, February 26, 2009
Wed, February 25, 2009 Analysts International Corporation: Analysts International Corporation Reports Fourth Quarter and Fiscal Year 2008 Financial Re
MINNEAPOLIS, MN--(Marketwire - February 25, 2009) - Analysts International Corporation (
For fiscal year 2008, the Company reported revenue of $284.2 million compared to $359.7 million in fiscal year 2007. The net loss for fiscal year 2008 was $10.1 million, or $0.41 per share, compared to a net loss of $16.2 million, or $0.65 per share, for the comparable period a year ago. The fiscal year 2008 loss included a non-cash charge of $6.3 million to write-off goodwill and a $3.3 million charge for restructuring, severance and other consulting costs, or $0.38 per share. The fiscal year 2007 loss included special charges of $15.4 million or $0.62 per share. Excluding these special charges, the Company's net loss was $0.6 million in fiscal year 2008, or $0.02 per share, compared to a net loss of $0.8 million in the fiscal year 2007, or $0.03 per share.
"2008 represented the first year of AIC's business transformation. As such, we made solid progress on our plan to transform AIC into a value-driven, higher margin IT services company. While the challenging economic environment has slowed our ability to realize the benefits of our transformation, we remain firmly committed to realizing that vision today," said Elmer Baldwin, President and CEO. "Our objective for 2009 is to continue to focus our business, reduce expenses and drive growth in our higher-margin services business by delivering value and exceeding clients' expectations each and every day."
"During these challenging economic times, we will continue to aggressively manage our cost structure and execute on our strategic plan of exiting lower-margin and non-core lines of business while investing in those areas that we believe are critical to the needs of our clients," said Randy Strobel, Chief Financial Officer. "In 2008, we made substantial progress in aligning the cost structure to the requirements of the business and investing in service offerings where we believe we have the potential to be successful in the marketplace. The cost reduction initiatives and strategic decisions we made in 2008 have positioned us well to continue our business transformation plan in 2009."
2008 Fourth Quarter and Fiscal Year Review
The decrease in revenue in the fourth quarter and fiscal year 2008 compared to the fourth quarter and fiscal year 2007, is a result of the negative impact the economic environment has had on the demand for IT professional services, staffing and products and the Company's planned exit from non-core and low-margin lines of business. Early in the third quarter of 2008, the Company sold Symmetry Workforce Solutions, its managed services business, to Comsys and discontinued its staffing relationship with one of its large accounts. Together, business through Symmetry and the large staffing account represented approximately $15 million in quarterly revenue and $60 million in annual revenue.
Gross margins were $11.0 million, or 19.3 percent of revenue, for the fourth quarter of 2008, compared to $15.2 million, or 17.3 percent of revenue, in the fourth quarter of 2007. Gross margins were $50.3 million, or 17.7 percent of revenue, for fiscal year 2008, compared to $58.0 million, or 16.1 percent of revenue, for fiscal year 2007. The increase in gross margins as a percent of revenue reflects the impact of implementing the Company's strategy of exiting low margin lines of business and accounts and the reduction in lower margin product sales.
Selling, administrative and other general expenses declined by $3.2 million in the fourth quarter of 2008, when compared to the fourth quarter of 2007, and by $8.3 million for fiscal year 2008, when compared to the comparable period of 2007. This is largely a result of the Company reducing its operating costs as part of the business transformation plan that was announced in early 2008.
The Company generated cash from operations of $4.1 million in the fourth quarter of 2008 compared to $7.6 million in the fourth quarter of 2007. The Company generated cash from operations of $5.4 million for fiscal year 2008 compared to $2.5 million in fiscal year 2007. As of January 3, 2009, the Company had a cash balance of $2.3 million and no borrowings from its $45 million credit facility.
Fourth Quarter and Fiscal Year 2008 Conference Call
Analysts will host a conference call on Thursday, February 26 at 9:00 a.m. CT to discuss fourth quarter and fiscal year 2008 financial results. Participants may access the call by dialing 1-877-857-6161, or 1-719-325-4765 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 p.m. CT on February 26, 2009, to 10:59 p.m. CT on March 5, 2009, by calling 1-866-245-6755, or 1-416-915-1035 for international callers, and using access code 908927.
About Analysts International Corporation
Analysts International Corporation (
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. Statements made in this press release or during the conference call referred to herein by the Company, its CEO Elmer Baldwin, or its CFO Randy Strobel, regarding, for instance: (i) the Company's commitment to executing its business transformation plan; (ii) the Company's intention to reduce expenses and exit lower margin and non-core lines of business; and (iii) management's beliefs with respect to the impact of cost reduction initiatives and strategic decisions made in 2008, are forward-looking statements. These forward-looking statements are based on current information, which we have assessed, which by its nature is dynamic and subject to rapid and even abrupt changes. Forward-looking statements include statements expressing the intent, belief or current expectations of the Company and members of our management team and involve certain risks and uncertainties, including (i) the risk that management may not fully or successfully implement its business transformation plan; (ii) the risk that the Company will not be able to successfully reduce costs or exit non-core or less desirable areas of the business in a timely manner or on favorable terms; (iii) prevailing market conditions in the IT services industry, including intense competition for billable technical personnel at competitive rates and strong pricing pressures from many of our largest clients and difficulty in identifying, attracting and retaining qualified billable technical personnel; (iv) potentially incorrect assumptions by management with respect to the downturn in the economy or the impact of prior cost reduction initiatives and strategic decisions; and (v) 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. You are cautioned not to place undue reliance on these or any forward-looking statements, which speak only as of the date of this press release and conference call.
(Financials follow)
Analysts International Corporation Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Twelve Months Ended -------------------- -------------------- Jan. 3, Dec. 29, Jan. 3, Dec. 29, 2009 2007 2009 2007 --------- --------- --------- --------- Professional services revenue: Provided directly $ 47,474 $ 60,097 $ 216,492 $ 243,372 Provided through subsuppliers 1,457 13,688 32,674 58,339 Product sales 7,862 13,984 35,037 57,959 --------- --------- --------- --------- Total revenue 56,793 87,769 284,203 359,670 Cost of goods and services sold: Cost of services provided directly 37,470 47,925 170,745 194,297 Cost of services provided through subsuppliers 1,394 13,108 31,494 55,989 Cost of product sales 6,971 11,554 31,653 51,338 --------- --------- --------- --------- Total cost of goods and services sold 45,835 72,587 233,892 301,624 Gross margin 10,958 15,182 50,311 58,046 Expenses: Selling, administrative and other operating costs 11,678 14,869 50,087 58,347 Restructuring, severance and other related costs 202 1,845 2,861 3,604 Amortization of intangible assets 234 266 1,027 1,065 Impairment of intangible assets -- 3,049 -- 3,049 Goodwill impairment 6,299 5,500 6,299 5,500 --------- --------- --------- --------- Operating loss (7,455) (10,347) (9,963) (13,519) Non-operating income 24 46 121 297 Interest expense (13) (141) (156) (384) --------- --------- --------- --------- Loss before income taxes (7,444) (10,442) (9,998) (13,606) Income tax expense 121 2,572 136 2,606 --------- --------- --------- --------- Net loss $ (7,565) $ (13,014) $ (10,134) $ (16,212) ========= ========= ========= ========= Per common share: Basic loss $ (0.30) $ (0.52) $ (0.41) $ (0.65) Diluted loss $ (0.30) $ (0.52) $ (0.41) $ (0.65) Average common shares outstanding 24,913 24,896 24,913 24,908 Average common and common equivalent shares outstanding 24,913 24,896 24,913 24,908 Analysts International Corporation Condensed Consolidated Balance Sheets (in thousands) January 3, December 29, 2009 2007 ---------- ---------- Assets Current assets: Cash and cash equivalents $ 2,288 $ 91 Accounts receivable, less allowance for doubtful accounts 40,814 66,074 Other current assets 1,521 2,101 ---------- ---------- Total current assets 44,623 68,266 Property and equipment, net 3,081 2,711 Other assets, net 6,550 14,294 ---------- ---------- Total assets $ 54,254 $ 85,271 ========== ========== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 15,581 $ 27,780 Salaries and vacations 2,648 6,885 Line of credit -- 1,587 Deferred revenue 1,473 1,943 Restructuring accrual, current portion 184 1,900 Health care reserves and other amounts 1,684 1,516 Deferred compensation 217 1,868 ---------- ---------- Total current liabilities 21,787 43,479 Non-current liabilities: Deferred compensation 1,068 927 Restructuring accrual 65 138 Other long-term liabilities 939 692 Shareholders' equity 30,395 40,035 ---------- ---------- Total liabilities and shareholders' equity $ 54,254 $ 85,271 ========== ========== Analysts International Corporation Reconciliation of non-GAAP Financial Measures (in thousands) Three Months Ended Twelve Months Ended ------------------- ---------------------- Jan. 3, Dec. 29, Jan. 3, Dec. 29, 2009 2007 2009 2007 -------- --------- --------- ----------- Net loss as reported $ (7,565) $ (13,014) $ (10,134) $ (16,212) Plus: Goodwill impairment 6,299 5,500 6,299 5,500 Restructuring, severance and other related costs 202 1,845 2,861 3,604 Impairment of intangibles and other long-lived assets --- 3,049 --- 3,049 Deferred tax asset valuation allowance adjustment --- 2,596 --- 2,596 Return of common stock --- --- --- (198) Other asset impairments and consulting related costs --- 477 421 886 -------- --------- --------- ----------- (Loss) income before special charges (1,064) 453 (553) (775) Stock based compensation expense 105 97 494 902 Depreciation 409 416 1,592 1,699 Amortization 234 266 1,027 1,065 Non-operating (income) expense (11) 95 35 285 Income tax expense (benefit) 121 (24) 136 10 -------- --------- --------- ----------- Adjusted EBITDA* $ (206) $ 1,303 $ 2,731 $ 3,186 ======== ========= ========= ===========
* Non-GAAP Financial Information
In evaluating the Company's business, the Company's management considers and uses Adjusted EBITDA as a supplemental measure of operating performance. Adjusted EBITDA refers to a financial measure that the Company defines as net income (loss) excluding interest, taxes, depreciation, amortization, share-based compensation, special charges and other gains and losses that are not related to the Company's operations. This measure is an essential component of the Company's internal planning process because it facilitates period-to-period comparisons of the Company's operating performance by eliminating potential differences in net income (loss) caused by the existence and timing of certain non-cash items, special charges and other gains and losses. 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.
