Volt Information Sciences, Inc. (OTC: VISI) today provided a
business update and reported selected unaudited financial
information for its fiscal 2011 third quarter ended July 31, 2011.
The Company noted that, due to a previously announced accounting
review, all numbers presented in this release are estimates.
Steven Shaw, Volt’s President and Chief Executive Officer,
stated, “The Staffing Services Segment, which accounts for a
majority of the Company’s total revenue, had approximately $460
million of revenue in the fiscal third quarter 2011 compared to
approximately $425 million for the same period in 2010. Staffing
Services revenue increased approximately 8% for the quarter, and
approximately 14% year-to-date, compared to the prior year. On
average, approximately 31,400 U.S. staffing employees were on
assignment in the quarter, compared to approximately 30,200 in the
third quarter of 2010. “
While the Telecommunications Services and the Printing and Other
Segments together sustained a small loss in the third quarter of
2011, these segments showed an improvement over the prior year’s
third quarter. Results for the Computer Systems Segment will be
reported after the accounting review is completed.
Liquidity
During the nine-month period the Company disbursed approximately
$37 million in connection with the restatement and related
investigations costs and approximately $12 million for net capital
expenditures, while cash of approximately $5 million was provided
by all other operating activities. The Company transferred
approximately $5 million during this period to restricted cash as
collateral for new European banking facilities and cash and cash
equivalents decreased by approximately an additional $13 million.
Borrowings under the accounts receivable securitization program
increased by approximately $30 million.
On July 31, 2011, the Company had cash and cash equivalents of
approximately $33 million and an additional approximately $35
million of cash set aside as collateral for foreign currency credit
lines and banking facilities. The Company also had approximately
$70 million available from its accounts receivable securitization
program. The Company’s consolidated borrowings were approximately
$102 million at July 31, 2011, which includes approximately $22
million of foreign currency borrowings primarily used to hedge
foreign denominated receivables and fully collaterized by
restricted cash, and approximately $80 million drawn under the $150
million securitization program. The approximately $80 million drawn
under the securitization program was increased to approximately $90
million in September 2011.
The Company believes that it has more than ample liquidity to
meet its business requirements currently and for the foreseeable
future.
VOLT INFORMATION SCIENCES, INC.
Unaudited, Estimated Condensed Statements of Cash Flows
(in Thousands) Nine Months Ended Three Months Ended July
31,2011 August 1,2010 July 31,2011 August 1,2010 Cash and
cash equivalents at beginning of the period $ 51,263 $ 118,757 $
38,034 $ 111,106 Cash used in connection with restatement
and related investigations (36,645 ) (13,658 ) (11,257 ) (7,981 )
Net cash provided by (used in) all other operating activities
5,437 (16,577 ) (3,631 ) (25,477
) Net cash used in operating activities (31,208 )
(30,235 ) (14,888 ) (33,458 ) Net cash used in
investing activities (11,534 ) (10,660 )
(3,321 ) (3,854 ) Net cash restricted as collateral
for borrowings (4,674 ) (28,768 ) (5,316 ) (28,768 ) Net cash
provided by (used in) all other financing activities 28,895
(3,852 ) 18,999 (688 ) Net cash
provided by (used in) financing activities 24,221
(32,620 ) 13,683 (29,456 )
Effect of exchange rate changes on cash 240
(145 ) (526 ) 759
Net decrease in cash and cash
equivalents
(18,281 ) (73,660 ) (5,052 ) (66,009 )
Cash and cash equivalents at end of the period $ 32,982 $
45,097 $ 32,982 $ 45,097
Note: Due to the pending restatement of the Company’s historical
financial statements (see discussion in the release text), all
financial numbers presented in this release should be considered
estimates.
Borrowing and Cash Positions (in
Thousands)
July 31,2011
October 31,2010
Cash and cash equivalents $ 32,982 $ 51,263 Cash restricted
as collateral for borrowings 35,103 30,429 Short-term investments
5,535 5,226 Total cash, cash restricted for
borrowings and short-term investments $ 73,620 $ 86,918
Short-term borrowings, including current portion of long-term debt
Accounts receivable securitization program $ 80,000 $ 50,000 Bank
loans and other 22,731 23,140 Long-term debt, excluding current
portion 10,025 10,626 Total short-term borrowings and
long-term debt $ 112,756 $ 83,766
Note: Due to the pending restatement of the Company’s historical
financial statements (see discussion in the release text), all
financial numbers presented in this release should be considered
estimates.
Preliminary Nature of Information
The financial information contained in this press release is
preliminary and unaudited, and has been prepared by management
based on currently available company data. This financial
information is subject to change based on the completion of the
Company’s ongoing review of accounting matters, the completion of
its fiscal 2010 and 2009 annual financial statements, the effects
of the accounting review on financial results for the fiscal years
2005 through 2008, the restatement of stockholders’ equity as of
the beginning of fiscal year 2005 for the effects of adjustments
prior to that year, and the completion of the audit of the
financial statements by the Company’s independent accountants. The
process of restating prior years’ financial statements is expected
to result in changes to the Company’s financial statements for
fiscal years 2005 through 2008 due to the correction of errors in
the application of certain accounting principles and methodologies
that individually or in the aggregate may be material. There can be
no assurance that the amounts reported today will not differ,
including materially, from those reported when the Company files
its 2009 and 2010 Form 10-Ks and other reports.
Since the re-evaluation is ongoing, the Company has limited the
scope of the financial information released today to the selected
unaudited financial information included in this release. The
Company does not expect to be in a position to announce audited
financial results for fiscal 2010 or 2009 (or prior years) until
appropriate accounting adjustments and restated financial
statements have been finalized for 2008 and prior periods, its
independent accountants have completed their audit procedures, and
amended Reports on Forms 10-K and 10-Q have been filed with the SEC
for the periods ended October 28, 2007 and November 2, 2008 and for
quarterly periods through May 3, 2009.
Please refer to the Company’s reports filed with the SEC for
further information.
About Volt Information Sciences, Inc.
Volt Information Sciences, Inc. is a leading provider of global
infrastructure solutions in technology, information services and
staffing acquisition for its FORTUNE 100 customer base. Operating
through an international network of servicing locations, the
Staffing Services Segment fulfills IT, engineering, administrative,
and industrial workforce requirements of its customers, for
professional search and temporary/contingent personnel as well as
managed services programs. Technology infrastructure services
include telecommunications engineering, construction, and
installation; and IT managed services and maintenance.
Information-based services are primarily directory assistance,
operator services, database management, and directory printing.
Visit www.volt.com.
Forward-Looking Statements
This press release contains forward-looking statements. Words
such as “may,” “will,” “should,” “likely,” “could,” “seek,”
“believe,” “expect,” “plan,” “anticipate,” “estimate,”
“optimistic”, “confident”, “project,” “intend,” “strategy,”
“designed to,” and similar expressions are intended to identify
forward-looking statements about the Company’s results of
operations, future plans, objectives, performance, intentions and
expectations. Forward-looking statements are subject to a number of
known and unknown risks, including, among others, the timing of,
and effects of the continued delay in, filing the Company’s
financial statements with the Securities and Exchange Commission,
general economic, competitive and other business conditions, the
degree and timing of customer utilization and rate of renewals of
contracts with the Company, and the degree of success of business
improvement initiatives, that could cause actual results,
performance and achievements to differ materially from those
described or implied in the forward-looking statements. Information
concerning these and other factors that could cause actual results
to differ materially from those in the forward-looking statements
are contained in Company reports filed with the Securities and
Exchange Commission.
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