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Investor Urges Analysts International to Consider Sale

Date: December 18 2012

by Jake Anderson
December 18, 2012
An investment firm is requesting that Analysts International Corporation, an Edina-based IT staffing and consulting firm, pursue a sale.
In a recent filing with the U.S. Securities and Exchange Commission, Milwaukee-based Heartland Advisors, Inc., introduced a shareholder proposal that asks Analysts International’s board to “immediately engage the services of an investment banking firm to evaluate alternatives that could enhance shareholder value, including, but not limited to, a merger or sale of the company.”
Heartland Advisors, which said it owns more than 9 percent of the company, claims that Analysts International’s “high quality talent and client lists have real value”—but due to its market capitalization of only $16 million, the company has difficulty attracting attention on Wall Street. Therefore, Analysts International would be better off as part of a larger entity or as a private company, which would eliminate the costs of being a public company, Heartland Advisors said.
“As long-term investors, we have taken the ‘wait and hope’ approach, and it has not worked,” Heartland Advisors said. “With today’s environment of low interest rates and robust private equity valuations, we believe the time to act is now. It is time for the company’s leadership to maximize value for shareholders and pursue strategic alternatives.”
A Monday afternoon call to an Analysts International spokesperson seeking comment on Heartland Advisors’ filing was not immediately returned.
In 2011, Analysts International reported $109.1 million in revenue, up about 2 percent from the previous year. Earnings, meanwhile, totaled $3.3 million—an improvement from a loss of $480,000 in 2010. For its most recent quarter, which ended September 29, the company reported a loss of $645,000 on revenue of $26.5 million.
Analysts International President and CEO Brittany McKinney said in a statement last month that the company was “disappointed” with its quarterly loss, “which was primarily due to unanticipated project-related charges and bad debt write-offs.”