----

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**(x)      Quarterly Report Pursuant to Section 13 or 15(d) of**

**the      Securities Exchange Act of 1934**

**(       ) Transition Report Pursuant to Section 13 or 15(d) of**

**the      Securities Exchange Act of 1934**

| **ANALYSTS                INTERNATIONAL CORPORATION**                                                      |
|------------------------------------------------------------------------------------------------------------|
| (Exact                name of registrant as specified in its charter)                                      |
|                                                                                                       |
| **Minnesota**                                                                                              | **41-0905408** |
| (State                of Incorporation)                                                                    | (IRS                Employer Identification No.) |
|                                                                                                       |   |
| **3601                West 76****th****Street**                                                            |   |
| **Minneapolis,                MN**                                                                         | **55435** |
| (Address                of Principal Executive Offices)                                                    | (Zip                Code) |
|                                                                                                       |   |
| Registrant’s                telephone number, including area code: **(952)                835-5900** |

----

----

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**ANALYSTS      INTERNATIONAL CORPORATION**

**INDEX**

| **Part                I.**   | **FINANCIAL                INFORMATION**                                                                                  |
|------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                      |
| Item                1.       | Financial                Statements                                                                                       |
|                         |                                                                                                                      |
|                         | Condensed                Consolidated Balance                Sheets                                                       |
|                         | July                2, 2005 (Unaudited) and January 1,                2005                                                |
|                         |                                                                                                                      |
|                         | Condensed                Consolidated Statements of                Operations                                             |
|                         | Three                and six months ended July 2, 2005 and July                3, 2004 (Unaudited)                        |
|                         |                                                                                                                      |
|                         | Condensed                Consolidated Statements of Cash                Flows                                             |
|                         | Three                and six months ended July 2, 2005 and July                3, 2004 (Unaudited)                        |
|                         |                                                                                                                      |
|                         | Notes                to Condensed Consolidated Financial Statements                (Unaudited)                            |
|                         |                                                                                                                      |
| Item                2.       | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations |
|                         |                                                                                                                      |
| Item                3.       | Quantitative                and Qualitative Disclosures About Market                Risk                                  |
|                         |                                                                                                                      |
| Item                4.       | Controls                and Procedures                                                                                    |
|                         |                                                                                                                      |
| **Part                II.**  | **OTHER                INFORMATION**                                                                                      |
|                         |                                                                                                                      |
| Item                2.       | Unregistered                Sales of Equity Securities and Use of                Proceeds                                 |
|                         |                                                                                                                      |
| Item                4.       | Submission                of Matters to a Vote of Security                Holders                                         |
|                         |                                                                                                                      |
| Item                6.       | Exhibits                                                                                                                  |
|                         |                                                                                                                      |
| Signatures                   |
|                         |                                                                                                                      |
| Exhibit                Index |

----

**PART      I. FINANCIAL INFORMATION**

**Item      1. Financial Statements**

**Analysts      International Corporation**

**Condensed      Consolidated Balance Sheets**

|                                                                     |   | **July                2,** |    | **January                1,** |   |
|--------------------------------------------------------------------------|--------|----------------------------|---------|-------------------------------|--------|
| ***(In                thousands)***                                      |   | **2005**                   |    | **2005**                      |   |
|                                                                     |   | ***(Unaudited)***          |    |                          |   |
| **ASSETS**                                                               |   |                       |    |                          |   |
|                                                                     |   |                       |    |                          |   |
| Current                assets:                                           |   |                       |    |                          |   |
| Cash                and cash equivalents                                 |   | $                          | 156     |                          | $      | 7,889 |   |
| Accounts                receivable, less allowance for doubtful accounts |   |                       | 59,281  |                          |   | 57,764 |   |
| Prepaid                expenses and other current assets                 |   |                       | 3,797   |                          |   | 3,208 |   |
| Total                current assets                                      |   |                       | 63,234  |                          |   | 68,861 |   |
|                                                                     |   |                       |    |                          |   |   |   |
| Property                and equipment, net                               |   |                       | 6,163   |                          |   | 5,658 |   |
| Intangible                assets                                         |   |                       | 10,088  |                          |   | 10,475 |   |
| Goodwill                                                                 |   |                       | 21,677  |                          |   | 16,460 |   |
| Other                assets                                              |   |                       | 4,956   |                          |   | 4,223 |   |
|                                                                     |   | $                          | 106,118 |                          | $      | 105,677 |   |
|                                                                     |   |                       |    |                          |   |   |   |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**                  |   |                       |    |                          |   |   |   |
|                                                                     |   |                       |    |                          |   |   |   |
| Current                liabilities:                                      |   |                       |    |                          |   |   |   |
| Accounts                payable                                          |   | $                          | 15,848  |                          | $      | 16,366 |   |
| Salaries                and vacations                                    |   |                       | 9,762   |                          |   | 9,388 |   |
| Line                of credit                                            |   |                       | 3,580   |                          |   | -- |   |
| Deferred                revenue                                          |   |                       | 1,415   |                          |   | 1,658 |   |
| Self-insured                health care reserves and other amounts       |   |                       | 1,609   |                          |   | 2,010 |   |
| Total                current liabilities                                 |   |                       | 32,214  |                          |   | 29,422 |   |
|                                                                     |   |                       |    |                          |   |   |   |
| Non-current                liabilities, primarily deferred compensation  |   |                       | 3,138   |                          |   | 3,637 |   |
| Shareholders'                equity                                      |   |                       | 70,766  |                          |   | 72,618 |   |
|                                                                     |   | $                          | 106,118 |                          | $      | 105,677 |   |

----

**Analysts      International      Corporation**

**Condensed      Consolidated Statements of Operations**

*(Unaudited)*

|                                                                   |   | **Three                Months Ended** |   | **Six                Months Ended** |   |
|------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------|--------|
|                                                                   |   | **July                2,**            |   | **July                3,**          |   | **July                2,** |   | **July                3,** |   |
| ***(In                thousands except per share amounts)***           |   | **2005**                              |   | **2004**                            |   | **2005** |   | **2004** |   |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |
| Revenue:                                                               |   |                                  |   |                                |   |   |   |   |   |
| Professional                services provided directly                 |   | $                                     | 66,267 |                                | $      | 67,511 |   | $ | 132,317 |   | $ | 134,935 |   |
| Professional                services provided through subsuppliers     |   |                                  | 7,520  |                                |   | 14,781 |   |   | 15,117 |   |   | 29,106 |   |
| Product                sales                                           |   |                                  | 5,317  |                                |   | 4,573 |   |   | 10,769 |   |   | 8,218 |   |
| Total                revenue                                           |   |                                  | 79,104 |                                |   | 86,865 |   |   | 158,203 |   |   | 172,259 |   |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Expenses:                                                              |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Salaries,                contracted services and direct charges        |   |                                  | 58,892 |                                |   | 66,626 |   |   | 117,959 |   |   | 132,861 |   |
| Cost                of product sales                                   |   |                                  | 4,804  |                                |   | 4,168 |   |   | 9,911 |   |   | 7,597 |   |
| Selling,                administrative and other operating costs       |   |                                  | 15,910 |                                |   | 15,159 |   |   | 31,364 |   |   | 30,240 |   |
| Merger                and severance related costs                      |   |                                  | 1,631  |                                |   | -- |   |   | 1,631 |   |   | -- |   |
| Amortization                of intangible assets                       |   |                                  | 194    |                                |   | 194 |   |   | 387 |   |   | 387 |   |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Operating                (loss) income                                 |   |                                  | (2,327 | )                                   |   | 718 |   |   | (3,049 | ) |   | 1,174 |   |
| Non-operating                income                                    |   |                                  | 1      |                                |   | 2 |   |   | 22 |   |   | 8 |   |
| Interest                expense                                        |   |                                  | (49    | )                                   |   | (14 | ) |   | (54 | ) |   | (22 | ) |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| (Loss)                income before income taxes                       |   |                                  | (2,375 | )                                   |   | 706 |   |   | (3,081 | ) |   | 1,160 |   |
| Income                tax expense (benefit)                            |   |                                  | --     |                                |   | -- |   |   | -- |   |   | -- |   |
| Net                (loss) income                                       |   | $                                     | (2,375 | )                                   | $      | 706 |   | $ | (3,081 | ) | $ | 1,160 |   |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Per                common share:                                       |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Basic                (loss) income                                     |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |
| Diluted                (loss) income                                   |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |
|                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Average                common shares outstanding                       |   |                                  | 24,504 |                                |   | 24,212 |   |   | 24,410 |   |   | 24,212 |   |
| Average                common and common equivalent shares outstanding |   |                                  | 24,504 |                                |   | 24,223 |   |   | 24,410 |   |   | 24,228 |   |

----

**Analysts      International      Corporation**

**Condensed      Consolidated Statements of Cash Flows**

*(Unaudited)*

|                                                               |   | **Six                Months Ended** |   |
|--------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                               |   | **July                2,**          |   | **July                3,** |   |
| ***(In                thousands)***                                |   | **2005**                            |   | **2004** |   |
|                                                               |   |                                |   |   |   |
| Net                cash (used in) provided by operating activities |   | $                                   | (4,538 | ) | $ | 1,038 |   |
|                                                               |   |                                |   |   |   |   |   |
| Cash                flows from investing activities:               |   |                                |   |   |   |   |   |
| Property                and equipment additions                    |   |                                | (1,813 | ) |   | (1,488 | ) |
| Proceeds                from property and equipment sales          |   |                                | 4      |   |   | 11 |   |
| Payments                for acquisitions, net of cash acquired     |   |                                | (5,033 | ) |   | -- |   |
| Net                cash used in investing activities               |   |                                | (6,842 | ) |   | (1,477 | ) |
|                                                               |   |                                |   |   |   |   |   |
| Cash                flows from financing activities:               |   |                                |   |   |   |   |   |
| Net                change in working capital line of credit        |   |                                | 3,580  |   |   | -- |   |
| Proceeds                from exercise of stock options             |   |                                | 67     |   |   | 1 |   |
| Net                cash provided by financing activities           |   |                                | 3,647  |   |   | 1 |   |
|                                                               |   |                                |   |   |   |   |   |
| Net                decrease in cash and cash equivalents           |   |                                | (7,733 | ) |   | (438 | ) |
|                                                               |   |                                |   |   |   |   |   |
| Cash                and cash equivalents at beginning of period    |   |                                | 7,889  |   |   | 4,499 |   |
|                                                               |   |                                |   |   |   |   |   |
| Cash                and cash equivalents at end of period          |   | $                                   | 156    |   | $ | 4,061 |   |
|                                                               |   |                                |   |   |   |   |   |
| **Non-cash                activities:**                            |   |                                |   |   |   |   |   |
| Value                of common stock issued for acquisitions       |   | $                                   | 1,000  |   |   | -- |   |
| Value                of common stock issued for stock awards       |   | $                                   | 28     |   |   | -- |   |

----

**Analysts      International Corporation**

**Notes      to Condensed Consolidated Financial Statements**

**1.**
**Summary      of Significant Accounting Policies**

|                                            |   | **July                2, 2005** |   | **January                1, 2005** |   |
|-------------------------------------------------|--------|---------------------------------|--------|------------------------------------|--------|
|   ***(In                thousands)*** |   | **Gross****Carrying****Amount** |   | **Accumulated****Amortization**    |   | **Other****Intangibles,****Net** |   | **Gross****Carrying****Amount** |   | **Accumulated****Amortization** |   | **Other****Intangibles,****Net** |   |
|                                            |   |                            |   |                               |   |   |   |   |   |   |   |   |   |
| Customer                list                    |   | $                               | 12,270 |                               | $      | (3,769 | ) | $ | 8,501 |   | $ | 12,270 |   | $ | (3,382 | ) | $ | 8,888 |   |
| Tradename                                       |   |                            | 1,720  |                               |   | (133 | ) |   | 1,587 |   |   | 1,720 |   |   | (133 | ) |   | 1,587 |   |
|                                            |   | $                               | 13,990 |                               | $      | (3,902 | ) | $ | 10,088 |   | $ | 13,990 |   | $ | (3,515 | ) | $ | 10,475 |   |

----

|                                                                                                                                                                          |   | **Three                Months Ended** |   | **Six                Months Ended** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------|--------|
|                                                                                                                                                                          |   | **July                2,**            |   | **July                3,**          |   | **July                2,** |   | **July                3,** |   |
| ***(in                thousands except per share amounts)***                                                                                                                  |   | **2005**                              |   | **2004**                            |   | **2005** |   | **2004** |   |
|                                                                                                                                                                          |   |                                  |   |                                |   |   |   |   |   |
| Net                (loss) income as reported                                                                                                                                  |   | $                                     | (2,375 | )                                   | $      | 706 |   | $ | (3,081 | ) | $ | 1,160 |   |
| Deduct:                Total stock-based employee compensation expense determined under                the fair                value based method, net of related tax effects |   |                                  | (95    | )                                   |   | (128 | ) |   | (237 | ) |   | (292 | ) |
| Pro                forma net (loss) income                                                                                                                                    |   | $                                     | (2,470 | )                                   | $      | 578 |   | $ | (3,318 | ) | $ | 868 |   |
|                                                                                                                                                                          |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Net                (loss) income per share:                                                                                                                                   |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Basic                - as reported                                                                                                                                            |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |
| Basic                - pro forma                                                                                                                                              |   |                                  | (.10   | )                                   |   | .02 |   |   | (.14 | ) |   | .04 |   |
|                                                                                                                                                                          |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Diluted                - as reported                                                                                                                                          |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |
| Diluted                - pro forma                                                                                                                                            |   |                                  | (.10   | )                                   |   | .02 |   |   | (.14 | ) |   | .04 |   |

**2.**
**Line      of Credit**

**3.**
**Shareholders'      Equity**

|                                                 |   | **Six                Months Ended** |   |
|------------------------------------------------------|--------|-------------------------------------|--------|
| ***(In                thousands)***                  |   | **July                2, 2005**     |   |
|                                                 |   |                                |   |
| Balance                at beginning of period        |   | $                                   | 72,618 |   |
|                                                 |   |                                |   |   |
| Issuance                of common stock              |   |                                | 1,095  |   |
| Amortization                of deferred compensation |   |                                | 134    |   |
| Comprehensive                loss                    |   |                                | (3,081 | ) |
|                                                 |   |                                |   |   |
| Balance                at end of period              |   | $                                   | 70,766 |   |

----

**4.**
**Earnings      Per Share**

|                                                                                      |   | **Three                Months Ended** |   | **Six                Months Ended** |   |
|-------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------|--------|
|                                                                                      |   | **July                2,**            |   | **July                3,**          |   | **July                2,** |   | **July                3,** |   |
| ***(In                thousands, except per share amounts)***                             |   | **2005**                              |   | **2004**                            |   | **2005** |   | **2004** |   |
|                                                                                      |   |                                  |   |                                |   |   |   |   |   |
| Net                (loss) income                                                          |   | $                                     | (2,375 | )                                   | $      | 706 |   | $ | (3,081 | ) | $ | 1,160 |   |
|                                                                                      |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Weighted-average                number of common shares outstanding                       |   |                                  | 24,504 |                                |   | 24,212 |   |   | 24,410 |   |   | 24,212 |   |
| Dilutive                effect of employee stock options                                  |   |                                  | --     |                                |   | 11 |   |   | -- |   |   | 16 |   |
| Weighted-average                number of common and common equivalent shares outstanding |   |                                  | 24,504 |                                |   | 24,223 |   |   | 24,410 |   |   | 24,228 |   |
|                                                                                      |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Net                (loss) income per share:                                               |   |                                  |   |                                |   |   |   |   |   |   |   |   |   |
| Basic                                                                                     |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |
| Diluted                                                                                   |   | $                                     | (.10   | )                                   | $      | .03 |   | $ | (.13 | ) | $ | .05 |   |

**5.**
**Restructuring**

|                                      |   | **Office                Closure/** |   |
|-------------------------------------------|--------|------------------------------------|--------|
| ***(In                thousands)***       |   | **Consolidation**                  |   |
|                                      |   |                               |   |
| Balance                at January 1, 2005 |   | $                                  | 318    |   |
|                                      |   |                               |   |   |
| Cash                expenditures          |   |                               | 128    |   |
|                                      |   |                               |   |   |
| Balance                at July 2, 2005    |   | $                                  | 190    |   |

----

**6.**
**Acquisitions**

*Redwood      Solutions Corporation*

*WireSpeed      Networks LLC *

----

**Item      2. Management's Discussion and Analysis of Financial Condition      and Results of Operations**

*Forward      Looking Statements*

----

*Estimates      of Future Operating Results*

*Allowance      for Doubtful Accounts*

*Accrual      of Unreported Medical Claims*

----

*Revenue        Recognition*

*Subsupplier      Revenue*

*Goodwill      and Intangible Impairment*

*Deferred      Taxes*

*Restructuring      Charge*

----

**RESULTS      OF OPERATIONS, THREE- AND SIX-MONTH PERIODS ENDED JULY 2, 2005 VS. JULY 3,      2004**

|                                                               |   | Three                Months Ended |   | Three                Months Ended |   |                               |   |
|--------------------------------------------------------------------|--------|-----------------------------------|--------|-----------------------------------|--------|------------------------------------|--------|
|                                                               |   | July                2, 2005       |   | July                3, 2004       |   | Increase                (Decrease) |   |
|                                                               |   |                              |   | %                of               |   |                               |   | %                of |   |  |   |  % |   | As                % of |   |
| *(dollars                in thousands)*                            |   | Amount                            |   | Revenue                           |   | Amount                             |   | Revenue |   | Amount |   | Inc                (Dec) |   | Revenue |   |
| Revenue:                                                           |   |                              |   |                              |   |                               |   |   |   |   |   |   |   |   |   |
| Professional                services provided directly             |   | $                                 | 66,267 |                              |   | 83.8                               | %      | $ | 67,511 |   |   | 77.7 | % | $ | (1,244 | ) |   | (1.8 | )% |   | 6.1 | % |
| Professional                services provided through subsuppliers |   |                              | 7,520  |                              |   | 9.5                                |   |   | 14,781 |   |   | 17.0 |   |   | (7,261 | ) |   | (49.1 | ) |   | (7.5 | ) |
| Product                sales                                       |   |                              | 5,317  |                              |   | 6.7                                |   |   | 4,573 |   |   | 5.3 |   |   | 744 |   |   | 16.3 |   |   | 1.4 |   |
| Total                revenue                                       |   |                              | 79,104 |                              |   | 100.0                              |   |   | 86,865 |   |   | 100.0 |   |   | (7,761 | ) |   | (8.9 | ) |   | .0 |   |
| Salaries,                contracted services and direct charges    |   |                              | 58,892 |                              |   | 74.4                               |   |   | 66,626 |   |   | 76.7 |   |   | (7,734 | ) |   | (11.6 | ) |   | (2.3 | ) |
| Cost                of product sales                               |   |                              | 4,804  |                              |   | 6.1                                |   |   | 4,168 |   |   | 4.8 |   |   | 636 |   |   | 15.3 |   |   | 1.3 |   |
| Selling,                administrative and other operating costs   |   |                              | 15,910 |                              |   | 20.1                               |   |   | 15,159 |   |   | 17.5 |   |   | 751 |   |   | 5.0 |   |   | 2.6 |   |
| Merger                and severance related costs                  |   |                              | 1,631  |                              |   | 2.1                                |   |   | -- |   |   | -- |   |   | 1,631 |   |   | 100.0 |   |   | 2.1 |   |
| Amortization                of intangible assets                   |   |                              | 194    |                              |   | .2                                 |   |   | 194 |   |   | .2 |   |   | -- |   |   | .0 |   |   | .0 |   |
| Non-operating                income                                |   |                              | (1     | )                                 |   | (.0                                | )      |   | (2 | ) |   | (.0 | ) |   | 1 |   |   | (50.0 | ) |   | .0 |   |
| Interest                expense                                    |   |                              | 49     |                              |   | .1                                 |   |   | 14 |   |   | .0 |   |   | 35 |   |   | 250.0 |   |   | .1 |   |
|                                                               |   |                              |   |                              |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)                income before income taxes                   |   |                              | (2,375 | )                                 |   | (3.0                               | )      |   | 706 |   |   | .8 |   |   | (3,081 | ) |   | (436.4 | ) |   | (3.8 | ) |
| Income                tax expense (benefit )                       |   |                              | --     |                              |   | .0                                 |   |   | -- |   |   | .0 |   |   | -- |   |   | .0 |   |   | .0 |   |
|                                                               |   |                              |   |                              |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) income                                   |   | $                                 | (2,375 | )                                 |   | (3.0                               | )%     | $ | 706 |   |   | .8 | % | $ | (3,081 | ) |   | (436.4 | )% |   | (3.8 | )% |

|                                                               |   | Six                Months Ended |    | Six                Months Ended |   |                               |   |
|--------------------------------------------------------------------|--------|---------------------------------|---------|---------------------------------|--------|------------------------------------|--------|
|                                                               |   | July                2, 2005     |    | July                3, 2004     |   | Increase                (Decrease) |   |
|                                                               |   |                            |    | %                of             |   |                               |   | %                of |   |  |   |  % |   | As                % of |   |
| *(dollars                in thousands)*                            |   | Amount                          |    | Revenue                         |   | Amount                             |   | Revenue |   | Amount |   | Inc                (Dec) |   | Revenue |   |
| Revenue:                                                           |   |                            |    |                            |   |                               |   |   |   |   |   |   |   |   |   |
| Professional                services provided directly             |   | $                               | 132,317 |                            |   | 83.6                               | %      | $ | 134,935 |   |   | 78.3 | % | $ | (2,618 | ) |   | (1.9 | )% |   | 5.3 | % |
| Professional                services provided through subsuppliers |   |                            | 15,117  |                            |   | 9.6                                |   |   | 29,106 |   |   | 16.9 |   |   | (13,989 | ) |   | (48.1 | ) |   | (7.3 | ) |
| Product                sales                                       |   |                            | 10,769  |                            |   | 6.8                                |   |   | 8,218 |   |   | 4.8 |   |   | 2,551 |   |   | 31.0 |   |   | 2.0 |   |
| Total                revenue                                       |   |                            | 158,203 |                            |   | 100.0                              |   |   | 172,259 |   |   | 100.0 |   |   | (14,056 | ) |   | (8.2 | ) |   | .0 |   |
| Salaries,                contracted services and direct charges    |   |                            | 117,959 |                            |   | 74.6                               |   |   | 132,861 |   |   | 77.1 |   |   | (14,902 | ) |   | (11.2 | ) |   | (2.5 | ) |
| Cost                of product sales                               |   |                            | 9,911   |                            |   | 6.3                                |   |   | 7,597 |   |   | 4.4 |   |   | 2,314 |   |   | 30.5 |   |   | 1.9 |   |
| Selling,                administrative and other operating costs   |   |                            | 31,364  |                            |   | 19.8                               |   |   | 30,240 |   |   | 17.6 |   |   | 1,124 |   |   | 3.7 |   |   | 2.2 |   |
| Merger                and severance related costs                  |   |                            | 1,631   |                            |   | 1.0                                |   |   | -- |   |   | -- |   |   | 1,631 |   |   | 100.0 |   |   | 1.0 |   |
| Amortization                of intangible assets                   |   |                            | 387     |                            |   | .2                                 |   |   | 387 |   |   | .2 |   |   | -- |   |   | .0 |   |   | .0 |   |
| Non-operating                income                                |   |                            | (22     | )                               |   | (.0                                | )      |   | (8 | ) |   | (.0 | ) |   | (14 | ) |   | 175.0 |   |   | .0 |   |
| Interest                expense                                    |   |                            | 54      |                            |   | .0                                 |   |   | 22 |   |   | .0 |   |   | 32 |   |   | 145.5 |   |   | .0 |   |
|                                                               |   |                            |    |                            |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)                income before income taxes                   |   |                            | (3,081  | )                               |   | (1.9                               | )      |   | 1,160 |   |   | .7 |   |   | (4,241 | ) |   | (365.6 | ) |   | (2.6 | ) |
| Income                tax expense (benefit )                       |   |                            | --      |                            |   | .0                                 |   |   | -- |   |   | .0 |   |   | -- |   |   | .0 |   |   | .0 |   |
|                                                               |   |                            |    |                            |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                (loss) income                                   |   | $                               | (3,081  | )                               |   | (1.9                               | )%     | $ | 1,160 |   |   | .7 | % | $ | (4,241 | ) |   | (365.6 | )% |   | (2.6 | )% |
|                                                               |   |                            |    |                            |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Personnel:                                                         |   |                            |    |                            |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Management                and administrative                       |   |                            | 450     |                            |   |                               |   |   | 410 |   |   |   |   |   | 40 |   |   | 9.8 | % |   |   |   |
| Technical                consultants                               |   |                            | 2,610   |                            |   |                               |   |   | 2,600 |   |   |   |   |   | 10 |   |   | .4 | % |   |   |   |

*Revenue*

----

*Salaries,      Contracted Services and Direct Charges*

*Cost      of Product Sales*

*Selling,      Administrative and Other Operating Costs*

*Merger      and Severance Related Costs*

*Non-Operating      Income*

*Interest      Expense*

----

*Income      Taxes*

*Personnel*

|                                                   |   |                       |   |                          |   |           |   | **Percentage** |   |
|--------------------------------------------------------|--------|----------------------------|--------|-------------------------------|--------|----------------|--------|----------------|--------|
|                                                   |   | **July                2,** |   | **January                1,** |   | **Increase**   |   | **Increase**   |   |
| ***(In                thousands except percentages)*** |   | **2005**                   |   | **2005**                      |   | **(Decrease)** |   | **(Decrease)** |   |
|                                                   |   |                       |   |                          |   |           |   |           |   |
| Cash                and Cash Equivalents               |   | $                          | 156    |                          | $      | 7,889          |   | $              | (7,733 | ) |   | (98.0 | )% |
| Accounts                Receivable                     |   |                       | 59,281 |                          |   | 57,764         |   |           | 1,517  |   |   | 2.6 |   |
| Other                Current Assets                    |   |                       | 3,797  |                          |   | 3,208          |   |           | 589    |   |   | 18.4 |   |
| Total                Current Assets                    |   | $                          | 63,234 |                          | $      | 68,861         |   | $              | (5,627 | ) |   | (8.2 | ) |
|                                                   |   |                       |   |                          |   |           |   |           |   |   |   |   |   |
| Accounts                Payable                        |   | $                          | 15,848 |                          | $      | 16,366         |   | $              | (518   | ) |   | (3.2 | ) |
| Salaries                and Vacations                  |   |                       | 9,762  |                          |   | 9,388          |   |           | 374    |   |   | 4.0 |   |
| Line                of Credit                          |   |                       | 3,580  |                          |   | --             |   |           | 3,580  |   |   | 100.0 |   |
| Other                Current Liabilities               |   |                       | 3,024  |                          |   | 3,668          |   |           | (644   | ) |   | (17.6 | ) |
| Total                Current Liabilities               |   | $                          | 32,214 |                          | $      | 29,422         |   | $              | 2,792  |   |   | 9.5 |   |
|                                                   |   |                       |   |                          |   |           |   |           |   |   |   |   |   |
| Working                Capital                         |   | $                          | 31,020 |                          | $      | 39,439         |   | $              | (8,419 | ) |   | (21.3 | ) |
| Current                Ratio                           |   |                       | 1.96   |                          |   | 2.34           |   |           | (.38   | ) |   | (16.2 | ) |
|                                                   |   |                       |   |                          |   |           |   |           |   |   |   |   |   |
| Total                Shareholders’ Equity        |   | $                          | 70,766 |                          | $      | 72,618         |   | $              | (1,852 | ) |   | (2.6 | )% |

*Cash      Requirements*

----

*Sources      and Uses of Cash/Credit Facility*

|  ***(in                thousands)*** |   |  **1                Year** |   |  **2-3                Years** |   |  **4-5                Years** |   | **Over                5****Years** |   |  **Total** |   |
|-------------------------------------------|--------|---------------------------------|--------|------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|-----------------|--------|
|                                      |   |                            |   |                               |   |                               |   |                               |   |            |   |
| Operating                Leases           |   | $                               | 4,959  |                               | $      | 6,272                              |   | $                                  | 726    |            | $      | -- |   | $ | 11,957 |   |
|                                      |   |                            |   |                               |   |                               |   |                               |   |            |   |   |   |   |   |   |
| Deferred                Compensation      |   |                            | 462    |                               |   | 2,018                              |   |                               | 217    |            |   | 869 |   |   | 3,566 |   |
|                                      |   |                            |   |                               |   |                               |   |                               |   |            |   |   |   |   |   |   |
| Total                                     |   | $                               | 5,421  |                               | $      | 8,290                              |   | $                                  | 943    |            | $      | 869 |   | $ | 15,523 |   |

* *

----

----

Solutions        Corporation during the second quarter of 2005.  These acquisitions        provide        the opportunity to expand our existing service offerings in the areas of        IP        telephony and data storage solutions.

 

Pursuit        of a merger and acquisition strategy presents significant risks to the        Company.  If we are unable to transition and maintain employee, client        and        vendor relationships of acquired companies, or are unable to integrate the        back        office operations of these companies to provide seamless and cost effective        service to our combined clients, the anticipated benefits of these transactions        may be less than expected.  Additionally, use of our financial resources        to        acquire these companies means these resources are not available for our ordinary        operations.  While we expect to enter into transactions that are accretive        to earnings and enhance our cash flow, failure to successfully integrate        acquired companies and achieve such results could have a material adverse        effect        on our business.

 

Controlling        operating costs while attempting not to impact our ability to respond to        our        clients also is a factor in our future success.  We have continued        to        streamline our operations by consolidating offices, reducing administrative        and        management personnel and continuing to review our company structure for more        efficient methods of operating our business and delivering our services.         We may not be able to continue to reduce costs without affecting our ability        to        timely deliver service to our clients and therefore may choose to forego        particular cost reductions, or to increase investments in certain areas,        if we        believe it would be prudent to do so for the future business of the        Company.

 

Compliance        with Section 404 of the Sarbanes-Oxley Act has created substantial cost to        us        and strained our internal resources.  We incurred significant costs        throughout 2004, and we expect to continue to incur costs in future years        to        maintain compliance.  An inability to control these costs, a failure        to        comply with Section 404, or a failure to adequately remediate control        deficiencies, if any, as they are identified could have a material adverse        effect on our business.

 

We        believe our working capital will be sufficient for the foreseeable needs        of our        business.  Significant rapid growth in our business, a major acquisition        or        a significant lengthening of payment terms with major clients, could create        a        need for additional working capital.  An inability to obtain additional        working capital, should it be required, could have a material adverse effect        on        our business.  We expect to be able to comply with the requirements        of our        credit agreement; however, failure to do so could have a material adverse        effect        on our business.

**Item      3. Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4. Controls and Procedures**

----

**PART      II. OTHER INFORMATION**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      4. Submission of Matters to a Vote of Security      Holders**

| **Nominee**                            |   | **Votes                  For** |   | **Authority                  Withheld** |
|----------------------------------------|--------|--------------------------------|--------|-----------------------------------------|
|                                   |   |                           |   |                                    |
| Willard                  W. Brittain   |   | 21,334,726                     |   | 869,684                                 |
| Krzysztof                  K. Burhardt |   | 21,340,790                     |   | 863,620                                 |
| Michael                  B. Esstman    |   | 21,347,262                     |   | 857,148                                 |
| Frederick                  W. Lang     |   | 20,912,861                     |   | 1,291,549                               |
| Michael                  J. LaVelle    |   | 20,925,231                     |   | 1,279,179                               |
| Margaret                  A. Loftus    |   | 20,948,136                     |   | 1,256,274                               |
| Edward                  M. Mahoney     |   | 20,892,911                     |   | 1,311,499                               |
| Robb                  L. Prince        |   | 20,804,570                     |   | 1,399,840                               |

| In                  favor | 21,766,965 |
|---------------------------|------------|
| Against                   | 294,779    |
| Abstain                   | 142,666    |

**Item      6. Exhibits**

| Exhibit                31.1 |   | Certification                of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of                2002.                                                                                      |
|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                                               |
| Exhibit                31.2 |   | Certification                of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of                2002.                                                                                      |
|                        |   |                                                                                                                                                                                               |
| Exhibit                32   |   | Certification                of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant                to                section 906 of the Sarbanes Oxley Act of                2002. |

----

**SIGNATURES**

|                                | ANALYSTS                INTERNATIONAL CORPORATION |
|-------------------------------------|---------------------------------------------------|
|                                | (Registrant)                                      |
|                                |                                              |   |
|                                |                                              |   |
|                                |                                              |   |
| Date:                August 8, 2005 | By:                                               | /s/                Michael J. LaVelle |
|                                |                                              | Michael                J. LaVelle |
|                                |                                              | Chief                Executive Officer |
|                                |                                              |   |
|                                |                                              |   |
| Date:                August 8, 2005 | By:                                               | David                J. Steichen |
|                                |                                              | David                J. Steichen |
|                                |                                              | Chief                Financial Officer |
|                                |                                              | (Principal                Financial and Accounting Officer) |

----

**EXHIBIT      INDEX**

| Exhibit                31.1 |   | Certification                of CEO Pursuant to Section 302 of the Sarbanes Oxley Act of                2002.                                                                                      |
|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                                               |
| Exhibit                31.2 |   | Certification                of CFO Pursuant to Section 302 of the Sarbanes Oxley Act of                2002.                                                                                      |
|                        |   |                                                                                                                                                                                               |
| Exhibit                32   |   | Certification                of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant                to                section 906 of the Sarbanes Oxley Act of                2002. |

----