**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 December 31, 2001**

 

**Commissionfile number  0-4090**

 

**ANALYSTSINTERNATIONAL CORPORATION**

    (Exact name of Registrant as specified inits charter)

 

 

 
| **Minnesota**                                                 |   | **41-0905408**                         |
|---------------------------------------------------------------|--------|----------------------------------------|
| (State of Incorporation)                                      |   | (IRS Identification No.)               |
|                                                          |   |                                   |
| **3601 West 76th  Street,  Minneapolis, Minnesota**      |   | **55435**                              |
| (Address of Principal Executive Office)                       |   | (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 |
|                                                          |   | Common Share Purchase Rights           |
|                                                               |        |                                        |  |

 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15 (d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 Yes ý   No o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements in Part III of thisForm 10-K or any amendment to this Form 10-K.  o

 

The aggregatemarket value of the voting stock (Common Stock) held by non-affiliates of theregistrant as of March 5, 2002 was $97,525,000 based upon the closing price asreported by Nasdaq.

 

As of March 5,2002 there were 24,196,705 shares of the registrant’s common stock outstanding.

 

 

 

**PART I**

 

 

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

 

                AnalystsInternational Corporation and its subsidiaries (“Analysts International,”“Analysts” or the “Company”) is a highly diversified eBusiness and InformationTechnology consulting and services firm. The Company’s mission is to provideclients with IT vision and value in addressing their IT needs. AnalystsInternational serves over 1,000 client companies through a network of salesoffices. The Company also has a minor presence in Canada and the UnitedKingdom.

 

Approximately 90 percent of Analysts’ revenue are fromservices provided to its existing customer base, which consists primarily ofFortune 500® companies. This high percentage of repeat businessdemonstrates the Company’s emphasis on customer satisfaction and development oflong-term relationships with customers who have an ongoing need for theservices Analysts International provides. Analysts offers its clients a fullrange of information technology consulting and software services offeringssometimes referred to in the industry as “solutions.”  These services and solutions include custom software applicationdevelopment under Company project management, traditional supplemental IT andsoftware engineering staffing under client project management, and singlesource staffing of programmers and other software professionals through theCompany’s Managed Services Group.  TheCompany also assists clients with their service needs in areas such aseBusiness consulting, mobile and wireless computing, network infrastructure,applications development and legacy system maintenance.  The Company’s engagements have involvednearly every type and manufacture of computer and all of the major operatingsystems.

 

In April 2000, the Company acquired 80.1% of theoutstanding common stock of SequoiaNET.com, Inc. (“Sequoia”).  The Company acquired the remaining 19.9% ofSequoia effective December 29, 2000. The Company believes that Sequoia has strengthened the Company’seBusiness capabilities, particularly in network infrastructure and web-basedapplications, and has given the Company market share dominance in theDetroit—Greater Michigan market.  Theacquisition also brought the Company key relationships with Microsoft, Cisco,Dell, HP and other key vendors in the network infrastructure arena. The Companyhas combined SequoiaNET.com’s offerings with select offerings of the Companyinto Analysts International’s Sequoia Services Group. These practices includeInternet Development, Applications Integration, Enterprise Networking, ProductProcurement, Sequoia Connect, Field Engineering, Hosting and Call Center.  The Sequoia Services Group offers itsservices in other geographical markets through Analysts International’s 34district sales offices and customer service sites.

 

One of Analysts International’s largest customers isQwest Communications.  The Qwest unitserved by the Company is headquartered in Denver and provides telecommunicationservices, as well as domestic and international cable and telephone, wirelesscommunications, directory and information services.  To meet these needs, and to facilitate its management of thecomputer programmers and other technical personnel on assignment at Qwest, theManaged Services Group of the Company fills requirements, manages assignedpersonnel and provides time record keeping/billing services through proprietarysoftware developed specifically for this service offering.  The Company’s contract expires January 31,2003, subject to Qwest’s right to cancel on 45 days’ notice, with an automaticone-year extension.  Revenue fromservices provided to Qwest was approximately 15% for the year endedDecember 31, 2001, and approximately 13%, 22%, and 23% during the sixmonth period ended December 31, 2000, and the two fiscal years ended June30, 2000 and 1999, respectively.  Lossof this business could have a material adverse effect on the Company.

 

The Company has expanded the Managed Services Groupoffering to other clients, including Chevron Information Technology Company(Chevron Corporation’s technology subsidiaries), Salt River Project (the nation’sthird largest public power utility), International Trucking, PacifiCare, andMotorola, including Motorola’s Semi-Conductor Products subsidiary.  These Managed Services Group customers usethe Company as their sole source for supplemental IT/software engineeringstaffing.

 

Analysts International provides services through allof its districts to various divisions of International Business MachinesCorporation (IBM).  The Company is anational service provider under IBM’s National Procurement initiative.  During the six-months ended December 31,2000, the Company successfully underwent a re-bidding process with IBM, and wasawarded a three-year contract as one of only five national service providers.  The Company’s contract with IBM expiresOctober 31, 2003, subject to IBM’s right to cancel for convenience on 30 days’written notice.  IBM’s NationalProcurement initiative requires the Company and other participating vendors toaccept lower hourly rates in return for the opportunity to do a greater volumeof business with IBM.  There can be noassurance, however, that volume will offset lower rates.  IBM business under the national contractaccounted for approximately 15% of revenue in the year ended December 31,2001, and 14%, 17% and 16% of revenue in the six month period ended December31, 2000 and in each of the last two fiscal years ended June 30, 2000 and 1999,respectively.  Loss of this businesscould have a material adverse effect on the Company.

 

 

2

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                AnalystsInternational provides its services to a wide range of industries.  Its revenue for the fiscal year endedDecember 31, 2001, was derived from services rendered to customers in thefollowing industry groups:

 

|                              |   | **Approximate  Percent of FY   2001 Revenue** |
|-----------------------------------|--------|-----------------------------------------------|
| Telecommunications/Transportation |   | 23.4                                          | % |
| Electronics/Manufacturing         |   | 19.3                                          | % |
| Services                          |   | 14.6                                          | % |
| Oil and Chemical                  |   | 13.7                                          | % |
| Health Care                       |   | 9.6                                           | % |
| Financial                         |   | 7.6                                           | % |
| Government                        |   | 4.4                                           | % |
| Merchandising                     |   | 2.1                                           | % |
| Other                             |   | 5.3                                           | % |

 

                AnalystsInternational provided services to more than 1,000 clients during the yearended December 31, 2001.  Consistentwith its practices in prior years, the Company rendered these services almostexclusively on a time and materials hourly rate basis under which invoices forservices rendered were submitted no less frequently than monthly with paymentgenerally due in 30 days.

 

# ***Organization and Marketing***

                AnalystsInternational provides its software services through its district sales andcustomer service offices, assigned on a geographical basis to one of tworegions.  Each district sales office isstaffed with technical personnel and is managed by a district sales manager(DSM), who has primary responsibility for the profitability of the district.  The DSM has broad authority to conduct theoperation of the office, subject to adherence to corporate policies.  In general, customer service offices areestablished to support specific projects for one or more specific customers atlocations not served by a district sales office and are managed by a districtsales office within the same geographical region.  A customer service office may become a district sales office whenthe volume of business and the prospects for additional business justify the additionalexpenses associated with district office status.

 

During the year ended December 31, 2001, the Companymaintained offices in the following locations: Atlanta, Austin, Boca Raton,Chicago, Cincinnati/Dayton, Cleveland, Columbus (Ohio), Dallas, Danbury,Denver, Des Moines, Detroit, Houston, Indianapolis, Kansas City, Iselin (NewJersey), Lexington (Kentucky), Los Angeles, Minneapolis, New York City, Omaha,Phoenix, Portland, Raleigh/Durham, Rochester (Minnesota), Rochester (New York),St. Louis, San Francisco, Seattle, Silicon Valley, Tampa, Toronto, Canada andTulsa.

 

Analysts International utilizes its own direct salesforce to sell its services.  At December31, 2001, the Company’s sales staff totaled more than 120 in number.  The ability to recruit and hire experiencedtechnical personnel with backgrounds and experience suitable for customerrequirements is an important factor in the Company’s business.  At December 31, 2001, the Company’srecruiting staff totaled more than 50 in number.

 

*Competition*

                AnalystsInternational competes with the software consulting divisions of several largecompanies (including Accenture, IBM, Olsten, Volt and Manpower) on a nationalbasis.  These organizations and theirsoftware consulting divisions are substantially larger than the Company interms of sales volume and personnel and have substantially greater financialresources.

 

The Company also competes with other national softwareservices companies such as Computer Task Group, Ciber, Keane Inc. and Computer Horizons.

 

The Company’s district and customer services officescompete in local market areas with numerous regional and locally based softwareservices firms.  Most of thesecompetitors are approximately the same size as or smaller than the Company’slocal office, although in certain market areas they are larger than theCompany’s local office.

 

Analysts believes its total staff and sales volume arelarger than most of the national, regional and local software servicescompanies, but in some market areas certain of these competitors may belarger.  Although there are nocomprehensive industry statistics available, the Company believes it is amongthe ten largest national software services companies in the United States.

 

Principal competitive factors in the software servicesbusiness include technical expertise, responsiveness to customers’ needs,reputation and credibility, and hourly rates. Analysts International believes it is competitive in these respects.

3

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*Personnel*

                AnalystsInternational has approximately 3,800 personnel. Of these, approximately 3,200are systems analysts, computer programmers and other business/technologypersonnel whose services are billable to clients.  Several years of programming experience is generally aprerequisite to employment with the Company.

 

Maintaining the present volume of the Company’sbusiness and growing that business depends to a significant extent on theCompany’s ability to attract and retain qualified technical personnel.  Although the Company has been able to attractand retain qualified technical personnel and believes its personnel relationsare satisfactory, there can be no assurance that Analysts International will beable to continue to attract and retain such personnel.  Its inability to do so could have a materialadverse effect on the Company’s business.

 

*OtherMatters*

                AnalystsInternational was incorporated under Minnesota law on March 29, 1966.  Its principal office is identified inresponse to Item 2 below.  Rawmaterials, seasonality, compliance with environmental protection laws, andpatents, trademarks, licenses, franchises or other concessions are not materialto an understanding of the Company’s business. No portion of the Company’s business is subject to re-negotiation ofprofits at the election of the government. Backlog is not material because nearly all of the Company’s contractsfor services, including contracts with the government (which are not material),are terminable by either the customer or the Company on notice of 30 days orless.

 

 

**CautionaryStatement under the Safe Harbor Provisions of the Private Securities LitigationReform Act of 1995.**

 

          The statements included in this document that are notstrictly historical fact, including without limitation, the Company’sstatements relating to the continued need of current and prospective customersfor the Company’s services and the Company’s ability to win that business, theeffects of competition and the Company’s ability to respond to competitiveconditions, the availability of qualified professional staff, the Company’sability to increase billing rates as labor costs increase, the Company’sability to maintain gross margin levels and control operating cost increases,the Company’s belief they will have the ability to secure favorable terms forthe refinancing of the Company’s debt and the Company’s ability to achieve andmaintain profitability are forward looking statements made under the safeharbor provision of the Private Securities Litigation Reform Act.  Words such as “believes,” “intends,”“possible,” “expects,” “estimates,” “anticipates,” or “plans” and similarexpressions are intended to identify forward-looking statements.  Such statements are based on the Company’scurrent expectations as of the date of this document but involve risks,uncertainties and other factors which could cause actual results to differmaterially from those contemplated by such forward looking statements.  Investors are cautioned to consider theseforward looking statements in light of important factors which may result invariations from results contemplated by such forward looking statements.

 

 

 

4

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**Item 2****.  Properties.**

 

                Analysts International’sprincipal executive offices and the Minneapolis district office are located at3601 West 76th Street, Minneapolis, Minnesota 55435, in a 134,000square foot office building which it owns. All other locations are held under leases with varying expiration datesranging from 30 days to 12 years.  SeeNote I of Notes to Consolidated Financial Statements included in this Form10-K.

 

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

 

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

 

**Item 4****.  Submission of Mattersto a Vote of Security Holders.**

 

No matters weresubmitted to a vote of the Company’s shareholders during the fourth quarter offiscal 2001.

 

 

5

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**ExecutiveOfficers**

 

 
| **Name**             |   | **Age** |   | **Title**                                                                                                                                                                                        |
|----------------------|--------|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |   |    |   |                                                                                                                                                                                             |
| Frederick W. Lang    |   | 77      |   | Chairman and Chief Executive Officer since 1989;  President and Chief Executive Officer from 1966-1989; Treasurer from  1987-1989.                                                               |
|                 |   |    |   |                                                                                                                                                                                             |
| Michael J. LaVelle   |   | 62      |   | President and Chief Operating Officer since 1999;  Sr.Vice President of Operations from 1998 to 1999; Southern Region Vice  President in 1996; Dallas Branch   Manager from 1989 to 1996.   |
|                 |   |    |   |                                                                                                                                                                                             |
| John D. Bamberger    |   | 46      |   | Senior Vice President of Sales and Operations since  2000; Chief Executive Officer of SequoiaNET.com from 1989 to 2000.                                                                          |
|                 |   |    |   |                                                                                                                                                                                             |
| Sarah P. Spiess      |   | 60      |   | Executive Vice President since 1996; Senior Vice  President during 1996; Vice President and General Manager of Southern Region  from 1992 to 1996; Minneapolis Branch Manager from 1979 to 1992. |
|                 |   |    |   |                                                                                                                                                                                             |
| Colleen M. Davenport |   | 39      |   | Secretary and General Counsel since 2000; assistant  secretary and associate general counsel from 1989 to 2000.                                                                                  |
|                 |   |    |   |                                                                                                                                                                                             |
| Marti R. Charpentier |   | 46      |   | Vice President, Finance  and Treasurer since 1999; Corporate Controller and Assistant Treasurer from  1989 to 1999.                                                                              |

 

Terms of office expire as of the Annual Meeting in2002.

 

 

6

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**PART II**

 

The followingportions of the Company’s annual report to shareholders for the fiscal yearended December 31, 2001 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                                                     |   | 30       |
|                    |   |                                                           |   |     |
| 6                       |   | Five Year Financial Summary                                    |   | 31       |
|                    |   |                                                           |   |     |
| 7                       |   | Management’s Discussion and Analysis                      |   | 12       |
|                    |   |                                                           |   |     |
| 7A                      |   | Market Conditions, Business Outlook and Risks to Our  Business |   | 16       |
|                    |   |                                                           |   |     |
| 8                       |   | Consolidated Financial Statements                              |   | 18       |

 

 

**Item 9.****          Changes in and Disagreements withIndependent Auditors on Accounting**

**                      andFinancial Disclosure.**

 

There have been nodisagreements with or changes in the Company’s independent auditors within thepast two fiscal years.

 

7

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**PART III**

 

The informationregarding executive officers required by Item 10 is set forth under the caption“Executive Officers” in Part I of this Form 10-K.  Other information called for in Part III, including informationregarding directors (Item 10), executive compensation (Item 11), and securityownership of certain beneficial owners and management (Item 12), is set forthin the Company’s definitive proxy statement for the annual meeting ofshareholders to be held May 1, 2002, filed pursuant to Regulation 14A, asfollows:

 
| **Items in  Form 10-K** |   | **Caption in Definitive Proxy Statement**        |   | **Page** |
|-------------------------|--------|--------------------------------------------------|--------|----------|
| 10                      |   | Election of Directors                            |   | 2-5      |
|                    |   |                                             |   |     |
| 11                      |   | Executive Compensation                           |   | 8-12     |
|                    |   |                                             |   |     |
| 12                      |   | Election of Directors and Principal Shareholders |   | 2-5, 15  |

 

 

**Item 13****.        CertainRelationships and Related Transactions.**

 

                During fiscal 2001:

 

a.                                       No director, executive officer, holder ofmore than five percent of the Company’s common stock or members of theimmediate family of any of the foregoing persons had any direct or indirectmaterial interest in any transaction or series of transactions to which theCompany was a party and in which the amount exceeded $60,000, nor is any suchtransaction proposed;

 

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

 

c.                                       No director, executive officer or (i) anymember of the immediate family of any of the foregoing, (ii) any corporation orbeneficial 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 ina similar capacity was indebted to the Company in excess of $60,000.

 

d.             Subparagraph d. of this Item is notapplicable.

 

8

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**PART IV**

**Item 14****. Exhibits,Consolidated Financial Statement Schedules and Reports on Form 8-K.**

a.1          *Consolidated Financial Statements*

 

                The consolidated financialstatements of Analysts International Corporation and its subsidiaries and therelated independent auditors’ report are included in the following pages of itsannual report to shareholders for the fiscal year ended December 31, 2001.

** **

| **Description**                                                                                                                                                                               |   | **Page in  Annual Report** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|
| Consolidated balance sheets at December 31, 2001 and  2000.                                                                                                                                   |   | 18                         |
|                                                                                                                                                                                          |   |                       |
| Consolidated statements of operations for the years  ended December 31, 2001 and 2000 (unaudited), the six months ended  December 31, 2000, and the years ended June 30, 2000, and 1999. |   | 19                         |
|                                                                                                                                                                                          |   |                       |
| Consolidated statements of cash flows for the years  ended December 31, 2001 and 2000 (unaudited), the six months ended  December 31, 2000, and the years ended June 30, 2000 and 1999.  |   | 20                         |
|                                                                                                                                                                                          |   |                       |
| Consolidated statements of shareholders’ equity for  the year ended December 31, 2001, the six months ended December 31, 2000, and  the years ended June 30, 2000 and 1999.              |   | 21                         |
|                                                                                                                                                                                          |   |                       |
| Notes to Consolidated Financial Statements                                                                                                                                                    |   | 22-28                      |
|                                                                                                                                                                                          |   |                       |
| Independent Auditors’ Report                                                                                                                                                             |   | 29                         |
|                                                                                                                                                                                          |   |                       |
| Report of Management                                                                                                                                                                          |   | 30                         |

 

 

a.2           *Consolidated Financial Statement Schedules.*

                

| **Description**                                      |   | **Page  Herein** |
|------------------------------------------------------|--------|------------------|
| Independent  Auditors’ Report on Schedule       |   | 12               |
|                                                 |   |             |
| Schedule II.  Valuation and Qualifying Accounts |   | 13               |

 

                Other consolidated financialstatement schedules are omitted because they are not required or theinformation is presented in the consolidated financial statements or notesthereto.

 

 

9

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a.3           *Exhibits.*

 

 
| **Exhibit  No.** |   |                                                                                                                                                                                                                                                                                                                                      |
|------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 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-c             |   | 1985 Incentive Stock Option Plan (Exhibit 10(d) to  Annual Report on Form 10-K for fiscal year 1991, 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             |   | Credit Agreement dated January 31, 2000, between  Analysts International Corporation and Norwest Bank Minnesota, National  Association (Exhibit 4 to Quarterly Report on Form 10-Q for quarter ended  March 31, 2000, Commission File No. 0-4090, incorporated by reference).                                                             |

 

 

10

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| 10-h   |   | First Amendment to the  Credit Agreement dated as of January 31, 2000.                                                                                                                                                         |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                           |
| 10-i   |   | Second Amendment to the Credit Agreement dated as of  January 31, 2000 (Exhibit B to Quarterly Report on Form 10-Q for the quarter  ended March 31, 2001, Commission File No. 0-4090, incorporated by reference).              |
|   |   |                                                                                                                                                                                                                           |
| 10-j   |   | Third Amendment to the Credit Agreement dated as of  January 31, 2000 (Exhibit B to the Quarterly Report on Form 10-Q for the  quarter ended September 30, 2001, Commission File No. 0-4090, incorporated by  reference).      |
|   |   |                                                                                                                                                                                                                           |
| 10-k   |   | Fourth Amendment to Credit Agreement dated as of  January 31, 2000.                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                           |
| 10-l   |   | Fifth Amendment to Credit Agreement dated as of  January 31, 2000.                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                           |
| 10-m   |   | 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-n   |   | 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-o   |   | 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-p   |   | 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-q   |   | Note Purchase Agreement dated December 30, 1998  (Exhibit 4(v) Quarterly Report on Form 10-Q for second quarter of fiscal year  1999, Commission File No. 0-4090, incorporated by reference).                                  |
|   |   |                                                                                                                                                                                                                           |
| 10-r   |   | First Amendment to the Note Purchase Agreement dated  as of December 30, 1998.  (Exhibit A  to Quarterly Report on Form 10-Q for quarter ended March 31, 2001, Commission  File No. 0-4090, incorporated by reference).   |
|   |   |                                                                                                                                                                                                                           |
| 10-s   |   | Second Amendment to the Note Purchase Agreement  dated as of December 30, 1998 (Exhibit A to Quarterly Report on Form 10-Q for  the quarter ended September 30, 2001, Commission File No. 0-4090,  incorporated by reference). |
|   |   |                                                                                                                                                                                                                           |
| 10-t   |   | Third Amendment to the Note Purchase Agreement dated  as of December 30, 1998.                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                           |
| 11     |   | Calculations of Earnings Per Share.                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                           |
| 13     |   | 2001 Annual Report to Shareholders                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                           |
| 21     |   | Subsidiaries of Registrant.                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                           |
| 23     |   | Independent Auditors’ Consent.                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                           |
| 24     |   | Powers of Attorney.                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                           |
| b.     |   | *Reports  on Form 8-K.*                                                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                           |
|   |   | None.                                                                                                                                                                                                                          |
|        |        |                                                                                                                                                                                                                                |  |  |  |

 

 

11

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Independent Auditors’ Report on Schedule

 

 

 

 

Shareholders andBoard of Directors

AnalystsInternational Corporation

Minneapolis,Minnesota

 

 

 

                We have audited the consolidatedfinancial statements of Analysts International Corporation and its subsidiariesas of  December 31, 2001, the six monthsended December 31, 2000 and each of the two years in the period ended June 30,2000, and have issued our report thereon dated February 27, 2002 (March 18,2002 as to the last paragraph of note E); such consolidated financialstatements and report are incorporated by reference in this report on Form10-K.  Our audits also included theconsolidated financial statement schedule of Analysts International Corporationand subsidiaries, listed in Item 14 a.2. This consolidated financial statement schedule is the responsibility ofAnalysts International Corporation’s management.  Our responsibility is to express an opinion based on ouraudits.  In our opinion, thisconsolidated financial statement schedule, when considered in relation to thebasic consolidated financial statements taken as a whole, presents fairly inall material respects the information set forth therein.

 

 
|                          |   |
|-------------------------------|--------|
| /s/ Deloitte & Touche LLP |   |
|                          |   |

Minneapolis,Minnesota

February 27, 2002(March 18, 2002 as to the last paragraph of note E)

 

 

12

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** Schedule II**

 

**Analysts International Corporation**

**Valuationand Qualifying Accounts**

 

 

** **
|                                  |   | **Additions**                            |      |
|---------------------------------------|--------|------------------------------------------|-----------|
| **Description**                       |   | **Balance at  beginning of period** |      | **Charged to  costs and expenses** |   | **Charged to    other accounts** |   | **Write-offs, net of recoveries** |   | **Balance at  end   of period** |   |
| Allowance for doubtful  accounts:     |   |                                     |      |   |   |   |   |   |   |   |   |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |
| Twelve months ended December 31, 2001 |   | $                                        | 2,110,000 |   | $ | 1,430,000 |   |   |   | $ | 2,370,000 |   | $ | 1,170,000 |   |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |
| Six months ended December 31, 2000    |   |                                     | 1,100,000 |   |   | 1,555,000 |   |   |   |   | 545,000 |   |   | 2,110,000 |   |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |
| Year ended June 30, 2000              |   | 850,000                                  |      | 350,000  |   | $ | 180,000 (1 | ) | 280,000 |   | 1,100,000 |   |
|                                  |   |                                     |      |   |   |   |   |   |   |   |   |
| Year ended June 30, 1999              |   | 750,000                                  |      | 989,000 |   |   |   | 889,000 |   | 850,000 |   |
|                                       |        |                                          |           |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

(1) Representsreserve established for Sequoia receivables on April 25, 2000, the date of theacquisition.

 

 

 

13

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**SIGNATURES**

 

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

 
| Date:  April 1, 2002 | ANALYSTS  INTERNATIONAL  CORPORATION |                |
|---------------------------|------------------------------------------------|---------------------|
|                      |                                           |                |
|                      | By:                                            | /s/ F.W. Lang       |   |
|                      |                                           | F.W. Lang, Chairman |   |

 

                Pursuant to the requirements of the SecuritiesExchange Act of 1924, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the datesindicated.

 
| **Signature**           |   | **Title**                                  |   | **Date**      |
|-------------------------|--------|--------------------------------------------|--------|---------------|
|                    |   |                                       |   |          |
| /s/ F.W. Lang           |   | Chairman & Chief Executive Officer     |   |          |
| F. W. Lang              |   |  (Principal  Executive Officer)       |   | April 1, 2002 |
|                    |   |                                       |   |          |
| /s/ M.R. Charpentier    |   | Vice President, Finance and Treasurer      |   |          |
| M. R. Charpentier       |   | (Principal Finance and Accounting Officer) |   |          |
|                    |   |                                       |   |          |
|                    |   | President and Chief Operating Officer      |   |          |
|  M.J.  LaVelle*    |   |                                       |   |          |
|                    |   |                                       |   |          |
|                    |   | Director                                   |   |          |
|  J.D.  Bamberger * |   |                                       |   |          |
|                    |   |                                       |   |          |
|                    |   | Director                                   |   |          |
|   W.K. Drake*      |   |                                       |   |          |
|                    |   |                                       |   |          |
|                    |   | Director                                   |   |          |
|   M.A.  Loftus*    |   |                                       |   |          |
|                    |   |                                       |   |          |
|                    |   | Director                                   |   |          |
|   E.M.  Mahoney*   |   |                                       |   |          |
|                    |   |                                       |   |          |
|                    |   | Director                                   |   |          |
|  R.L. Prince*      |   |                                       |   |          |

 

----

*F. W. Lang, by signinghis name hereto, hereby signs this Form 10-K on behalf of the persons indicatedpursuant to powers of attorney filed herewith.

 
| /s/ F.W. Lang       |
|---------------------|
| F.W. Lang, Chairman |

 

 

 

14

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**EXHIBIT INDEX**

 

 
| **Exhibit  Number** |   | **Description**                                                                |
|---------------------|--------|--------------------------------------------------------------------------------|
| 10-h                |   | First Amendment to the Credit Agreement dated as of  January 31, 2000.         |
|                |   |                                                                           |
| 10-k                |   | Fourth Amendment to the Credit Agreement dated as of  January 31, 2000.        |
|                |   |                                                                           |
| 10-l                |   | Fifth Amendment to the Credit Agreement dated as of  January 31, 2000.         |
|                |   |                                                                           |
| 10-t                |   | Third Amendment to the Note Purchase Agreement dated  as of December 28, 2001. |
|                |   |                                                                           |
| 11                  |   | Calculations of Earnings Per Share.                                            |
|                |   |                                                                           |
| 13                  |   | 2001 Annual Report to Shareholders                                             |
|                |   |                                                                           |
| 21                  |   | Subsidiaries of Registrant.                                                    |
|                |   |                                                                           |
| 23                  |   | Independent Auditors’ Consent.                                            |
|                |   |                                                                           |
| 24                  |   | Powers of Attorney.                                                            |

 

 

For a list of exhibits incorporated by reference andnot filed with this Form 10-K, see Item 14 a.3 at pages 10 and 11 of this Form10-K.

 

 

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