**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**





**FORM
10-K**





**ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
THE SECURITIES EXCHANGE ACT OF 1934**


**For
the fiscal year ended January 1, 2005**





**Commission
file number 0-4090**





**ANALYSTS
INTERNATIONAL CORPORATION**


(Exact
Name of Registrant as Specified in Its Charter)








**Minnesota**
    **41-0905408**(State
      of Incorporation)
    (I.R.S.
      Employer Identification No.)**3601
      West 76th Street, Minneapolis, Minnesota**
    **55435**(Address
      of Principal Executive Offices)
    (Zip
      Code)





Registrant’s
telephone number, including area code: **(952)
835-5900**





Securities
registered pursuant to Section 12 (b) of the Act: **NONE**





Securities
registered pursuant to Section 12 (g) of the Act:





**Common
Stock, par value $.10 per share**


(Title of
class)





**Common
Share Purchase Rights**


(Title of
class)








Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o





Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). Yes x No o





The
aggregate market value of the voting stock (Common Stock) held by non-affiliates
of the registrant as of the last business day of the registrant’s most recently
completed second fiscal quarter (July 3, 2004) was $76,025,545 based upon the
closing price as reported by Nasdaq.





As of
March 7, 2005 there were 24,319,050 shares of the registrant's common stock
outstanding.





**DOCUMENTS
INCORPORATED BY REFERENCE**





Incorporated
by reference herein are portions of (i) the annual report to shareholders for
the year ended January 1, 2005 (Parts I, II and IV) and (ii) the proxy statement
for the registrant’s 2005 Annual Meeting of Shareholders to be held on May 26,
2005 (Part III).




















**PART
I**




**Item
1.**  **Business.**





*Introduction*





Established
in 1966, Analysts International Corporation (“Analysts International,”
“Analysts” or the “Company”), a Minnesota corporation, is a technology services
company that specializes in delivering and integrating technology for
businesses. Analysts International partners with industry leaders to deliver the
hardware, applications and expertise to help advance businesses through the
intelligent application of technology. In the United States, Analysts
International serves client companies through a network of offices. We also have
a minor presence in Canada and in the United Kingdom where we have a
wholly-owned subsidiary, AiC Analysts Ltd.





*Development
of Business; Service Offerings*





We offer
our clients a full range of information technology consulting and software
development and other services, including offerings sometimes referred to in the
industry as “solutions” or “projects.” Service offerings are divided into four
categories: Staffing Services, providing IT supplemental staffing and managed
team services; Technology Integration, specializing in the delivery, integration
and implementation of applications and hardware; Outsourcing, delivering local,
national and global capabilities for organizational streamlining and cost
reduction; and Advisory Services, providing methodologies and processes for
implementing technology and managing human capital.





We also
provide our clients with single source (or vendor management services) staffing
of programmers and other software professionals through our Managed Services
Group (MSG) as well as application development and legacy system maintenance
services. Furthering our efforts to deliver high quality solutions at
competitive prices, we have an offshore development capability that spans all of
our service offerings, and during the past few years, we have made
organizational changes to allow us to more easily customize our delivery of
services to clients.





Approximately
90 percent of Analysts International’s revenue is from services provided to its
existing customer base, which consists primarily of Fortune 500 ® companies. This high percentage of repeat business demonstrates our emphasis on
customer satisfaction and development of long-term relationships with customers
who have an ongoing need for the services we provide.





In 2000,
we acquired the outstanding common stock of SequoiaNET.com, Inc. (“Sequoia”).
With our acquisition of Sequoia, we expanded our existing service offerings to
include web site development and other eBusiness services, network
infrastructure, additional application development capabilities and other IT
services. The Sequoia acquisition also brought us key relationships with
Microsoft, Cisco, Dell, HP and key vendors in the network infrastructure arena.
Since the acquisition, we have integrated Sequoia’s offerings with our existing
services and now offer specific services in the areas of Internet Protocol (IP)
telephony and wireless communications, Enterprise Resource Planning (ERP)
integration, infrastructure services, storage solutions, security and business
continuity planning, portals and collaboration, customer relationship
management, network design, managed services, offshore advisory, IT outsourcing,
hosting, service desk and warranty services. We offer these services through
Analysts International’s area sales and customer service offices.





During
2002, we established a wholly-owned subsidiary, Medical Concepts Staffing, Inc.
through which we have begun to offer staffing services to the medical industry.
This subsidiary did not generate significant revenue during 2004.





In 2003,
Analysts International formed a relationship with Mastek, Ltd. of Mumbai, India
(d.b.a. Majesco Software Inc. in the United States). This capability, available
in all our service offerings, combines the cost advantages of offshore services
with the reduced risk that comes with an established local company managing
projects in accordance with ISO 9001, SEI CMM Level 5 and SEI P-CMM Level 3
certification and other industry standards.


2


*Major
clients*





*Bank
of America Corporation*





During
2004 and 2003 our revenue from services provided to Bank of America (the “Bank”)
was approximately 11% and 5% of our total revenue, respectively. During 2004 and
2003, subsupplier revenue (revenue derived from use of personnel from other IT
staffing firms) represents 61% and 64%, respectively, of our revenue from the
Bank. Effective in late 2004, Analysts International is no longer a prime vendor
at Bank of America due to changes in the Bank’s IT procurement process. As a
result, effective for fiscal year 2005, we will no longer recognize subsupplier
revenue with respect to this account. While we have entered into an agreement
with one of the Bank’s current prime vendors, our direct revenue for services
provided to Bank of America will likely decline.





*Chevron/Texaco*





During
2004 and 2003 our revenue from services provided to Chevron/Texaco represented
4% of our total revenue.





*International
Business Machines Corporation*





We also
provide services through most of our area offices to various divisions of
International Business Machines Corporation (IBM), another major client of the
Company. Analysts International’s contract with IBM was renewed on October 31,
2004 and expires on October 31, 2005. IBM has the right to extend the contract
under the current terms, conditions and prices for up to three years in varying
increments.





IBM
requires Analysts International and other participating vendors to accept lower
hourly rates in return for the opportunity to do a greater volume of business
with IBM. There can be no assurance, however, that volume will offset lower
rates. IBM business under the national contract accounted for approximately 12%
and 13% of our total revenue for fiscal years 2004 and 2003, respectively. Loss
of this business or a substantial portion of it could have a material adverse
effect on the Company.





*Lexmark
International, Inc.*





For over
ten years, Analysts International has provided staffing services for Lexmark
International, Inc., a Lexington, Kentucky-based company that is a leading
developer, manufacturer and supplier of laser and inkjet printers, multifunction
products, associated supplies and services. In fiscal 2003, Lexmark chose
Analysts International as one of three prime vendors to continue to provide
staffing services. The parties signed a service agreement for staffing on June
27, 2003. The initial term of the agreement continues through June 27, 2005.
Lexmark has the option to extend the term for up to three consecutive one-year
periods. Also in 2003, Lexmark engaged Analysts International’s Managed Services
Group to implement a Vendor Management System (VMS), a web-based application for
managing temporary labor resources. Under this agreement, Analysts International
also provides consolidated billing for all of Lexmark’s contract suppliers and
training and process management for the VMS tool and system.





Revenue
from services provided to Lexmark was approximately 5% of our total revenue for
each of fiscal years 2004 and 2003.





*Revenue
by Industry*





Analysts
International provides its services to a wide range of industries. Its revenue
for fiscal 2004 was derived from services rendered to customers in the following
industry groups:


**Approximate
      Percent of**
      **FY
      2004 Revenue**Services
    29.1%Financial
    20.1%Electronics/Manufacturing
    19.4%Oil
      and Chemical
    9.5%Transportation
    7.3%Merchandising
    4.3%Government
    3.5%Telecommunications
    3.5%Health
      Care
    3.1%Other
    0.2%





3





Analysts
International provided services to more than 1,000 clients during 2004.
Consistent with its practices in prior years, the Company rendered these
services almost exclusively on a time and materials hourly rate basis under
which invoices for services rendered were submitted no less frequently than
monthly with payment generally due in 30 days.





*Organization
and Marketing*





Analysts
International provides its services through area sales and customer service
offices, assigned on a geographical basis to one of seven areas and a national
business group. Each area sales office is staffed with sales, recruiting and
technical personnel and is managed by an area sales manager, who has primary
responsibility for the profitability of the area. The area sales manager has
broad authority to conduct the operation of the office, subject to adherence to
corporate policies. In general, Analysts International establishes customer
service offices to support specific projects for one or more customers in areas
not served by an area sales office and manages them through an area sales office
within the same geographical region. A customer service office may become an
area sales office, usually when the volume of business and the prospects for
additional business justify the additional expenses associated with area office
status.








During
the year ended January 1, 2005, the Company maintained a business
presence in the following locations: Atlanta, GA; Austin, TX; Boca Raton,
FL; Boulder, CO; Charlotte, NC; Chicago, IL; Cincinnati, OH; Columbus, OH;
Dallas, TX; Denver, CO; Des Moines, IA; Detroit, MI; Grand Rapids, MI; Houston,
TX; Indianapolis, IN; Kansas City, MO; Lansing, MI; Las Vegas, NV; Lexington,
KY; Los Angeles, CA; Minneapolis, MN; New York, NY; Omaha, NE; Phoenix, AZ;
Raleigh/Durham, NC; Richmond, VA; Rochester, MN; Rochester, NY; St. Louis, MO;
San Francisco, CA; Seattle, WA; Silicon Valley, CA; Tampa, FL; Toledo, OH;
Tulsa, OK; Toronto, Canada; and London, England.








Analysts
International utilizes its own direct sales force to sell its services. At
January 1, 2005, the Company employed more than 75 sales staff. The ability to
recruit and hire experienced technical personnel with backgrounds and experience
suitable for customer requirements is an important factor in the Company’s
business. At January 1, 2005, the Company’s recruiting staff totaled more than
sixty.





*Competition*





Analysts
International competes with the computer consulting and/or IT supplemental
staffing divisions of several large companies (including Adecco, Accenture,
Kelly Services, Modis, TEKsystems and Manpower) on a national basis. These
organizations and their applicable divisions are substantially larger than the
Company in terms of sales volume and personnel and have substantially greater
financial resources.








Analysts
International also competes with other national software services companies such
as Computer Task Group, Ciber, Keane and Computer Horizons.








Analysts
International’s area and customer service offices compete in local markets with
numerous regional and local software services firms. Most of these competitors
are approximately the same size as or smaller than the Company’s local office,
although in certain market areas they are larger than the Company’s local
office.








Analysts
International believes its total staff and sales volume are larger than many of
the national, regional and local software services companies, but certain
competitors are larger.








Principal
competitive factors in the software services business include technical
expertise, responsiveness to customers' staffing needs, reputation and
credibility, service delivery models and tools and hourly rates. Analysts
International believes it is competitive in these respects.





*Personnel*





As of
January 1, 2005, Analysts International had approximately 3,015 personnel. Of
these, approximately 2,585 are systems analysts, computer programmers and other
business/technology personnel whose services are billable to clients. Several
years of experience in the IT industry is generally a prerequisite to employment
with the Company.


4


*Available
Information*





We
maintain our company website at www.analysts.com and make
available, free of charge, our annual reports on Form 10-K, quarterly reports on
Form 10-Q and current reports on Form 8-K, and amendments to these reports, in
the Investor Relations section of the website as soon as reasonably practicable
after we electronically file such material with, or furnish such material to,
the SEC.





*Other
Matters*





The
Company’s principal office is identified in response to Item 2 below. Raw
materials, seasonality, compliance with environmental protection laws, and
patents, trademarks, licenses, franchises or other concessions are not material
to an understanding of the Company’s business. No portion of the Company’s
business is subject to re-negotiation of profits at the election of the
government. Backlog is not material because nearly all of the Company’s
contracts for services, including contracts with the government (which are not
material), are terminable by either the customer or the Company on notice of 30
days or less.








**Cautionary
Statement under the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995.**





Statements
contained herein, which are not strictly historical fact, are forward-looking
statements. Words such as “believes,” “intends,” “possible,” “expects,”
“estimates,” “anticipates,” or “plans” and similar expressions are intended to
identify forward-looking statements. Any forward-looking statements in this
release are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are based on the
Company’s current expectations relating to future revenues, earnings, results of
operations and future sales or growth. The Company’s actual results may vary
materially from those projected due to certain risks and uncertainties such as
the general state of the economy, volume of business activity, continued need
for our services by current and prospective clients, client cancellations or
re-bidding of work, the Company’s ability to control and improve profit margins,
including our ability to control operating and labor costs and hourly rates for
our services, the availability and utilization of qualified technical personnel
and other similar factors. For more information concerning risks and
uncertainties to the Company’s business refer to the discussion in the “Market
Condition, Business Outlook and Risks to Our Business” section in the Company’s
Annual Report for the year ended January 1, 2005 incorporated herein as Exhibit
13, and the Company’s prior Annual Reports, 10-Ks, 10-Qs, other Securities and
Exchange Commission filings and investor relations materials.


5




Item 2.  **Properties.**





Analysts
International’s principal executive offices and the Minneapolis area office are
located at 3601 West 76th Street, Minneapolis, Minnesota 55435, in a 134,000
square foot office building in which it leases approximately 93,000 square feet.
All other locations are held under leases with varying expiration dates ranging
from 30 days to 4 years. See Note H of Notes to Consolidated Financial
Statements incorporated by reference in this Form 10-K.








**Item
3.**  **Legal
Proceedings.**





There are
no pending legal proceedings to which the Company is a party or to which any of
its property is subject, other than routine litigation incidental to the
business.








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





No
matters were submitted to a vote of the Company’s shareholders during the fourth
quarter of fiscal 2004.


6


**EXECUTIVE
OFFICERS OF THE COMPANY**





**Name**
    
    **Age**
    
    **Title**Michael
      J. LaVelle
    
    65
    
    Chairman
      of the Board and Chief Executive Officer since 2004; President and Chief
      Executive Officer from 2002 to 2004; President and Chief Operating Officer
      from 1999 to 2002; Senior Vice President of Operations from 1998 to 1999;
      Southern Region Vice President from 1996 to 1998; Dallas Branch Manager
      from 1989 to 1996.Jeffrey
      P. Baker
    
    42
    
    President
      since 2004. Prior to joining Analysts International in 2004 as President,
      Mr. Baker was a partner and member of the Executive Leadership Team for
      PricewaterhouseCoopers (PwC) Consulting. He oversaw the firm's 1,300
      partners and 32,000 staff members across 52 global territories and advised
      some of the firm's premier clients on large-scale M&A
      transactions.John
      D. Bamberger
    
    49
    
    Executive
      Vice President and Chief Operating Officer since 2002; Senior Vice
      President of Sales and Operations from 2000 to 2002; Chief Executive
      Officer of SequoiaNET.com from 1989 to 2000.David
      J. Steichen
    
    40
    
    Chief
      Financial Officer and Treasurer since 2003; Corporate Controller and
      Treasurer from 1999 to 2003.Colleen
      M. Davenport
    
    41
    
    Secretary
      and General Counsel since 2000; Assistant Secretary and Associate General
      Counsel from 1989 to 2000.
   Terms of
office expire as of the Annual Meeting in 2005.


7


**PART
II**








The
following portions of the Company’s annual report to shareholders for the fiscal
year ended January 1, 2005 are incorporated by reference in response to Items 5,
6, 7 and 8 as follows:





**Items
      in Form 10-K**
    
    **Caption/Section
      in Annual Report**
    
    **Page**5
    
    Stock
      Data
    
    356
    
    Five
      Year Financial Summary
    
    367
    
    Management’s
      Discussion and Analysis
    
    9-198
    
    Financial
      Statements, Quarterly Revenues and Income
    
    20-23,37








**Item
7a.**  **Quantitative
and Qualitative Disclosures About Market Risk**





Our
financing agreement with GE Capital Corporation carries a variable interest
rate, which exposes us to certain market risks. Market risk is the potential
loss arising from the adverse changes in market rates and prices, such as
interest rates. Market risk is estimated as the potential increase in fair value
resulting from a hypothetical one percent increase in interest rates. For
example, while our outstanding balance on our line of credit has averaged less
than $1.0 million during 2004, if our average outstanding debt balance were $5.0
million, a one percent increase in interest rates would result in an annual
interest expense increase of approximately $50,000.





**Item
9.**  **Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.**





There
have been no disagreements with or changes in the Company’s independent auditors
within the past two fiscal years.





**Item
9a.**  **Controls
and Procedures**





(a)  Evaluation
of Disclosure Controls and Procedures.





As of the
end of the period covered by this report, the Company conducted an evaluation
under the supervision and with the participation of the Company’s management,
including the Company’s Chief Executive Officer, Michael J. LaVelle, and Chief
Financial Officer, David J. Steichen, regarding the effectiveness of the design
and operation of the Company’s disclosure controls and procedures pursuant to
Rules 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company’s disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
its reports filed under the Exchange Act is recorded, processed, summarized and
reported within the time period specified in the rules of the Securities
Exchange Commission.





(b)  Management’s
Report on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rules
13a-15(f). Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of our internal control over financial
reporting based on the framework in *Internal
Control - Integrated Framework* issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on our evaluation under the framework in *Internal
Control - Integrated Framework* , our
management concluded that our internal control over financial reporting was
effective as of January 1, 2005. Our management’s assessment of the
effectiveness of our internal control over financial reporting as of January 1,
2005 has been audited by Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report which is included in our
Annual Report to Shareholders filed herein as Exhibit 13.





(c)  Changes
in Internal Controls





There
were no changes in the Company’s internal control over financial reporting that
occurred during the period covered by this report that have materially affected,
or are reasonably likely to materially affect, the Company’s internal control
over financial reporting.


8


**Item
9b.**  **Other
Information.**





1. On
October 21, 2004, the Company set director compensation for the 2005 fiscal
year. Board members will receive an annual retainer of $20,000, board meeting
fees of $1,000 per meeting, committee meeting fees of $1,500 for the committee
chair and $1,000 for committee members per meeting, 1,000 shares of restricted
company stock and 8,000 non-qualified options to purchase shares of company
stock.  Accordingly,
on January 3, 2005, 1,000 shares of restricted stock and 8,000 non-qualified
options were issued to board members Burhardt, Drake, Esstman, Lang, Loftus,
Mahoney and Prince.
 
 2. On
October 21, 2004, the Company agreed to the following with Chief Executive
Officer Michael J. LaVelle: Mr. LaVelle will remain as Chairman and Chief
Executive Officer until the end of the 2005 fiscal year. Thereafter, Mr. LaVelle
will remain as Chairman until the end of the 2007 fiscal year and will work for
the Company as an employee-consultant at the rate of $190,000 annually. The
Company also awarded Mr. LaVelle 100,000 shares of restricted stock to vest in
equal increments over three years.
 
 3. On
March 15, 2005, the Compensation Committee of the Board of Directors adopted the
2005 management incentive compensation plan. A summary of the management
incentive compensation plan is attached hereto as Exhibit 10-ii.
 
 4. On
March 15, 2005, the Compensation Committee of the Board of Directors raised Mr.
LaVelle’s annual base salary from $380,000 to $400,000.
 5. On
March 15, 2005, the Company entered into an amendment to the Change in Control
Agreements signed with the individuals set forth in Exhibits 10-z through 10-ee
and entered into Change in Control Agreements with the individuals set forth in
Exhibits 10-ff through 10-hh. The agreements call for: i) payment by the Company
of 2.99 times the executive’s annual salary and targeted bonus; ii) 36 months of
continued health, dental and other benefits; iii) vesting of outstanding stock
options; and iv) gross-up of payments if the payments trigger excise tax under
section 4999 of the Tax Code.





**PART
III**





The
information regarding executive officers required by Item 10 is set forth under
the caption “Executive Officers of the Company” in Part I of this Form 10-K.
Other information called for in Part III, including information regarding
directors of the registrant (Item 10), executive compensation (Item 11),
security ownership of certain beneficial owners and management (Item 12), and
principal accounting fees and services (Item 14), is set forth in the Company’s
definitive proxy statement for the annual meeting of shareholders to be held May
26, 2005, filed pursuant to Regulation 14A, as follows:





**Items
      in Form 10-K**
    
    **Caption
      in Definitive Proxy Statement**10a
    
    Election
      of Directors10b
    
    Audit
      Committee Financial Expert10c
    
    Code
      of Ethics11
    
    Executive
      Compensation12
    
    Election
      of Directors and Principal Shareholders14
    
    Independent
      Audit Fees








**Item
13.**  **Certain
Relationships and Related Transactions.**





During
fiscal 2004:





a.
    In
      fiscal year 2004, the Company paid Piper Jaffray & Co. (“Piper
      Jaffray”) approximately $71,000 for financial consulting and advisory
      services. Katie L. Norman, the daughter of board member Frederick W. Lang,
      received approximately $28,400 of the above amount for services rendered
      in connection with the
transaction;





b.
    The
      Company was not a party with any entity in which any of the Company’s
      directors was an executive officer, held more than a 10% equity interest,
      was a member of or of counsel to (in the case of a law firm) or was a
      partner or executive officer (in the case of an investment banking firm),
      in any transaction involving payments of more than five percent of the
      gross revenues of either the Company or such entity, nor is any such
      transaction proposed; and





c.
    No
      director, executive officer or (i) any member of the immediate family of
      any of the foregoing, (ii) any corporation or beneficial holder of ten
      percent or more of any class of equity securities, or (iii) any trust or
      other estate in which such person served as a trustee or in a similar
      capacity was indebted to the Company in excess of
  $60,000.





d.
    Subparagraph
      d. of this Item is not applicable.


9


**PART
IV**


**Item
15.**  **Exhibits
and Consolidated Financial Statement Schedules.**





a.1  *Consolidated
Financial Statements*





The
consolidated financial statements of Analysts International Corporation and its
subsidiaries and the related independent registered public accounting firm’s
reports are included in the following pages of its annual report to shareholders
for the fiscal year ended January 1, 2005.





**Description**
    
    **Page
      in Annual Report**Consolidated
      balance sheets at January 1, 2005 and January 3, 2004.
    
    20Consolidated
      statements of operations for the years ended
      January
      1, 2005, January 3, 2004 and December 28, 2002.
    
    21Consolidated
      statements of cash flows for the years ended
      January
      1, 2005, January 3, 2004 and December 28, 2002.
    
    22Consolidated
      statements of shareholders’ equity for the years ended
      January
      1, 2005, January 3, 2004 and December 28, 2002.
    
    23Notes
      to Consolidated Financial Statements
    
    24-31Reports
      of Independent Registered Public Accounting Firm
    
    32-33Report
      of Management
    
    34Management’s
      Report on Internal Control Over Financial Reporting
    
    34








a.2  *Consolidated
Financial Statement Schedules*








**Description**
    
    **Page
      Herein**Report
      of Independent Registered Public Accounting Firm
    
    13Schedule
      II. Valuation and Qualifying Accounts
    
    14





Other
consolidated financial statement schedules are omitted because they are not
required or the information is presented in the consolidated financial
statements or notes thereto.





10


b.  *Exhibits.*
 
 
 **Exhibit
      No.**
    
    **Description**3-a
    
    Articles
      of Incorporation, as amended (Exhibit 3-a to Annual Report on Form 10-K
      for fiscal year 1988, Commission File No. 0-4090, incorporated by
      reference).3-b
    
    Restated
      Bylaws. (Exhibit 3-b to Annual Report on Form 10-K for fiscal year 2000,
      Commission File no. 0-4090, incorporated by reference).3-c
    
    Amendment
      to Articles of Incorporation to increase authorized shares to 40 million
      (Exhibit A to Definitive Proxy Statement dated September 5, 1996,
      Commission File No. 0-4090, incorporated by reference).3-d
    
    Amendment
      to Articles of Incorporation to increase authorized shares to 60 million
      (Exhibit 3-d to Annual Report on Form 10-K for fiscal year 1998,
      Commission File No. 0-0409, incorporated by reference).3-e
    
    Amendment
      to Articles of Incorporation to increase authorized shares to 120 million
      (Exhibit A to Definitive Proxy Statement dated September 8, 1998,
      Commission File No. 0-0409, incorporated by reference).4-a
    
    Specimen
      Common Stock Certificate (Exhibit 4(a) to Annual Report on Form 10-K for
      fiscal year 1989, Commission File No. 0-4090, incorporated by
      reference).4-b
    
    Rights
      Agreement dated as of June 16, 1989 between Analysts International
      Corporation and Norwest Bank Minnesota, N.A., as Rights Agent which
      includes the form of Rights Certificate and Summary of Rights (Exhibit A
      to the Registrant's Form 8-A dated June 16, 1989, Commission File No.
      0-4090, incorporated by reference).4-c
    
    First
      Amendment to Rights Agreement dated as of May 8,1990 between Analysts
      International Corporation and Norwest Bank Minnesota, N.A. as Rights Agent
      (Exhibit 4(c) to Annual Report on Form 10-K for fiscal year 1991,
      Commission File No. 0-4090, incorporated by reference).4-d
    
    Second
      Amendment to Rights Agreement dated as of April 30, 1996 between Analysts
      International Corporation and Norwest Bank Minnesota as Rights Agent
      (Exhibit 4(d) to Annual Report on Form 10-K for fiscal year 1996,
      Commission File No. 0-4090, incorporated by reference).4-e
    
    Restated
      Rights Agreement dated as of June 16, 1989 and restated as of April 16,
      1998 between Analysts International Corporation and Norwest Bank
      Minnesota, N.A. as Rights Agent (Exhibit 4-e to Annual Report on Form 10-K
      for fiscal year 1998, Commission File No. 0-4090, incorporated by
      reference).10-a
    
    Senior
      Executive Retirement Plan (Exhibit 10-e to Annual Report on Form 10-K for
      fiscal year 1984, Commission File No. 0-4090, incorporated by
      reference).10-b
    
    Deferred
      Compensation Plan (Exhibit 10-g to Annual Report on Form 10-K for fiscal
      year 1984, Commission File No. 0-4090, incorporated by
      reference).10-d
    
    1994
      Stock Option Plan (Exhibit A to Definitive Proxy Statement dated September
      6, 1994 for registrant's 1994 Annual Meeting of Shareholders, Commission
      File No. 0-4090, incorporated by reference).10-e
    
    1996
      Stock Option Plan for Non-employee Directors (Exhibit B to Definitive
      Proxy Statement dated September 5, 1996, Commission File No. 0-4090,
      incorporated by reference).10-f
    
    1999
      Stock Option Plan (Exhibit A to Definitive Proxy Statement dated
      September 13, 1999, Commission File No. 0409, incorporated by
      reference).10-g
    
    Stock
      Purchase Agreement dated April 12, 2000 (Exhibit 2.1 to Form 8-K, filed
      May 5, 2000, Commission File No. 0-4090, incorporated by
      reference).10-h
    
    Trust
      Agreement dated October 20, 1992, with Norwest Bank Minneapolis, N.A.
      (Exhibit 3-b to Annual Report on Form 10-K for fiscal year 2000,
      Commission File no. 0-4090, incorporated by reference).10-i
    
    Form
      of letter agreement providing employment continuation following a change
      of control. (Exhibit 3-b to Annual Report on Form 10-K for fiscal year
      2000, Commission File no. 0-4090, incorporated by
    reference).10-j
    
    Form
      of letter agreement providing incentive bonus protection following a
      change of control. (Exhibit 3-b to Annual Report on Form 10-K for fiscal
      year 2000, Commission File no. 0-4090, incorporated by
      reference).10-k
    
    Credit
      Agreement dated April 11, 2002 between Analysts International Corporation
      and General Electric Capital Corporation. (Exhibit 2.1 to current report
      in Form 8-K dated April 26, 2002, Commission File No. 0-4090, incorporated
      by reference).10-l
    
    First
      Amendment to Credit Agreement dated as of July 24, 2002. (Exhibit 10-l to
      Annual Report on Form 10-K for fiscal year 2002, Commission File no.
      0-4090, incorporated by reference).10-m
    
    Waiver
      and Second Amendment to Credit Agreement dated as of April 7, 2003.
      (Exhibit 10-m to Annual Report on Form 10-K for fiscal year 2003,
      Commission File no. 0-4090, incorporated by
reference).


11


10-n
    
    Third
      Amendment to Credit Agreement dated as of April 28, 2003. (Exhibit 10-n to
      Annual Report on Form 10-K for fiscal year 2003, Commission File no.
      0-4090, incorporated by reference).10-o
    
    Consent
      and Fourth Amendment to Credit Agreement dated as of December 31, 2003.
      (Exhibit 10-o to Annual Report on Form 10-K for fiscal year 2003,
      Commission File no. 0-4090, incorporated by reference).10-p
    
    2004
      Equity Incentive Plan. (Exhibit 10-p on Form 10-Q for period ended July 3,
      2004, Commission file no. 0-4090, incorporated by
    reference).10-q
    
    Employment
      contract with Jeffrey P. Baker. (Exhibit 10-q on Form 10-Q for period
      ended July 3, 2004, Commission file no. 0-4090, incorporated by
      reference).10-r
    
    Fifth
      Amendment to Credit Agreement dated as of August 5, 2004. (Exhibit 10-r on
      Form 10-Q for period ended October 2, 2004, Commission file no. 0-4090,
      incorporated by reference).10-s
    
    Asset
      Purchase Agreement between Analysts International Corporation and
      Wirespeed Networks LLC.10-t
    
    Consent
      and Sixth Amendment to Credit Agreement dated as of January 6,
      2005.10-u
    
    Standard
      Nonqualified Stock Option Agreement for Board Members under 2004 Equity
      Incentive Plan.10-v
    
    Standard
      Restricted Stock Agreement for Board Members under 2004 Equity Incentive
      Plan.10-w
    
    Standard
      Nonqualified Stock Option Agreement for Certain Employees under 2004
      Equity Incentive Plan.10-x
    
    Standard
      Restricted Stock Agreement for Certain Employees under 2004 Equity
      Incentive Plan.10-y
    
    Standard
      Incentive Stock Option Agreement for Certain Employees under 2004 Equity
      Incentive Plan.10-z
    
    Change
      in Control Agreement between Analysts International Corporation and
      Jeffrey P. Baker dated as of June 18, 2004, as amended March 15,
      2005.10-aa
    
    Change
      in Control Agreement between Analysts International Corporation and
      Michael J. LaVelle dated as of December 18, 2000, as amended March 15,
      2005.10-bb
    
    Change
      in Control Agreement between Analysts International Corporation and John
      D. Bamberger dated as of December 18, 2000, as amended March 15,
      2005.10-cc
    
    Change
      in Control Agreement between Analysts International Corporation and David
      J. Steichen dated as of December 18, 2000, as amended March 15,
      2005.10-dd
    
    Change
      in Control Agreement between Analysts International Corporation and
      Colleen M. Davenport dated as of December 18, 2000, as amended March 15,
      2005.10-ee
    
    Change
      in Control Agreement between Analysts International Corporation and
      Paulette M. Quist dated as of December 18, 2000, as amended March 15,
      2005.10-ff
    
    Change
      in Control Agreement between Analysts International Corporation and Walter
      P. Michels dated as of March 15, 2005.10-gg
    
    Change
      in Control Agreement between Analysts International Corporation and David
      H. Jenkins dated as of March 15, 2005.10-hh
    
    Change
      in Control Agreement between Analysts International Corporation and Praba
      Manivasager dated as of March 15, 2005.10-ii
    
    Summary
      of 2005 Management Incentive Compensation Plan.13
    
    2004
      Annual Report to Shareholders.18
    
    Letter
      of Preferability from Deloitte & Touche LLP regarding change in date
      for annual goodwill assessment. (Exhibit 18 on Form 10-Q for period ended
      October 2, 2004, Commission file no. 0-4090, incorporated by
      reference).21
    
    Subsidiaries
      of Registrant.23
    
    Consent
      of Independent Registered Public Accounting Firm.24
    
    Powers
      of Attorney.31.1
    
    Certification
      of CEO under section 302 of the Sarbanes-Oxley Act of
  2002.31.2
    
    Certification
      of CFO under section 302 of the Sarbanes-Oxley Act of
  2002.32
    
    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.


12


**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**











Shareholders
and Board of Directors


Analysts
International Corporation


Minneapolis,
Minnesota











We have
audited the consolidated financial statements of Analysts International
Corporation and subsidiaries as of January 1, 2005 and January 3,
2004, and for the years ended January 1, 2005, January 3, 2004 and
December 28, 2002, and have issued our report thereon dated March 17, 2005,
which report expresses an unqualified opinion and includes an explanatory
paragraph relating to the change in the method of accounting for goodwill and
certain intangibles in 2002; such consolidated financial statements and report
are included in your 2004 annual report to shareholders, and are incorporated
herein by reference. Our audits also included the financial statement schedule
listed in Item 15a.2. This consolidated financial statement schedule is the
responsibility of Analysts International Corporation’s management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.











/s/
      Deloitte & Touche LLPMinneapolis,
      MinnesotaMarch
      17, 2005





13


**Schedule
II**








**Analysts
International Corporation**


**Valuation
and Qualifying Accounts**








**Additions****Description**
    
    **Balance
      at beginning of period**
    
    **Charged
      to costs**
      **and
      expenses**
    
    **Write-offs,**
      **net
      of recoveries**
    
    **Balance
      at end**
      **of
      period**Allowance
      for doubtful accounts:Twelve
      months ended January 1, 2005
    
    $
    1,508,000
    
    $
    630,000
    
    $
    329,000
    
    $
    1,809,000Twelve
      months ended January 3, 2004
    
    
    1,283,000
    
    
    1,200,000
    
    
    975,000
    
    
    1,508,000Twelve
      months ended December 28, 2002
    
    
    1,170,000
    
    
    1,842,000
    
    
    1,729,000
    
    
    1,283,000





14





**SIGNATURES**








Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


ANALYSTS
      INTERNATIONAL CORPORATIONDate:
      March 17, 2005
    By:
    /s/
      Michael J. LaVelleMichael
      J. LaVelle, Chief Executive Officer


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





**Signature**
    
    **Title**
    
    **Date**/s/
      Michael J. LaVelle
    
    Chief
      Executive Officer
    
    March
      17, 2005Michael
      J. LaVelle
    
    (Principal
      Executive Officer), Chairman/s/
      David J. Steichen
    
    Chief
      Financial Officer and Treasurer
    
    March
      17, 2005David
      J. Steichen
    
    (Principal
      Finance and Accounting Officer)Executive
      Vice President andJohn
      D. Bamberger*
    
    Chief
      Operating Officer, DirectorChairman
      Emeritus, and DirectorFred
      W. Lang*DirectorKrzysztof
      K. Burhardt*DirectorWillis
      K. Drake*DirectorMichael
      B. Esstman*DirectorMargaret
      A. Loftus*DirectorEdward
      M. Mahoney*DirectorRobb
      L. Prince*








*Michael
J. LaVelle, by signing his name hereto, hereby signs this Form 10-K on behalf of
the persons indicated pursuant to powers of attorney filed
herewith.


/s/
      Michael J. LaVelleMichael
      J. LaVelle, Chief Executive
Officer


15





**EXHIBIT
INDEX**


**Exhibit
      No.**
    
    **Description**10-s
    
    Asset
      Purchase Agreement between Analysts International Corporation and
      Wirespeed Networks LLC.10-t
    
    Consent
      and Sixth Amendment to Credit Agreement dated as of January 6,
      2005.10-u
    
    Standard
      Nonqualified Stock Option Agreement for Board Members under 2004 Equity
      Incentive Plan.10-v
    
    Standard
      Restricted Stock Agreement for Board Members under 2004 Equity Incentive
      Plan.10-w
    
    Standard
      Nonqualified Stock Option Agreement for Certain Employees under 2004
      Equity Incentive Plan.10-x
    
    Standard
      Restricted Stock Agreement for Certain Employees under 2004 Equity
      Incentive Plan.10-y
    
    Standard
      Incentive Stock Option Agreement for Certain Employees under 2004 Equity
      Incentive Plan.10-z
    
    Change
      in Control Agreement between Analysts International Corporation and
      Jeffrey P. Baker dated as of June 18, 2004, as amended March 15,
      2005.10-aa
    
    Change
      in Control Agreement between Analysts International Corporation and
      Michael J. LaVelle dated as of December 18, 2000, as amended March 15,
      2005.10-bb
    
    Change
      in Control Agreement between Analysts International Corporation and John
      D. Bamberger dated as of December 18, 2000, as amended March 15,
      2005.10-cc
    
    Change
      in Control Agreement between Analysts International Corporation and David
      J. Steichen dated as of December 18, 2000, as amended March 15,
      2005.10-dd
    
    Change
      in Control Agreement between Analysts International Corporation and
      Colleen M. Davenport dated as of December 18, 2000, as amended March 15,
      2005.10-ee
    
    Change
      in Control Agreement between Analysts International Corporation and
      Paulette M. Quist dated as of December 18, 2000, as amended March 15,
      2005.10-ff
    
    Change
      in Control Agreement between Analysts International Corporation and Walter
      P. Michels dated as of March 15, 2005.10-gg
    
    Change
      in Control Agreement between Analysts International Corporation and David
      H. Jenkins dated as of March 15, 2005.10-hh
    
    Change
      in Control Agreement between Analysts International Corporation and Praba
      Manivasager dated as of March 15, 2005.10-ii
    
    Summary
      of 2005 Management Incentive Compensation Plan.13
    
    2004
      Annual Report to Shareholders.21
    
    Subsidiaries
      of Registrant.23
    
    Consent
      of Independent Registered Public Accounting Firm.24
    
    Powers
      of Attorney.31.1
    
    Certification
      of CEO under section 302 of the Sarbanes-Oxley Act of
  2002.31.2
    
    Certification
      of CFO under section 302 of the Sarbanes-Oxley Act of
  2002.32
    
    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.
For a
list of exhibits incorporated by reference and not filed with this Form 10-K,
see Item 15b on pages 11 and 12 of this Form 10-K.


16