Volt Information Sciences, Inc. (OTC: VISI) today provided a
business update and reported selected unaudited financial
information for its fiscal second quarter and first fiscal six
months of 2012 ended April 29, 2012. The Company noted that due to
the previously announced ongoing accounting review and anticipated
restatement, all numbers presented in this release are
estimates.
The Staffing Services Segment, which accounts for a majority of
the Company’s total revenue, had approximately $501 million of
revenue in the second quarter 2012 compared to approximately $479
million for the same period in 2011. For the first six months of
2012 the Staffing Services Segment had approximately $963 million
of revenue compared to approximately $929 million for the same
period in 2011. The increase for the second quarter includes
approximately $9 million primarily from increased associate vendor
employees on assignment, and approximately $13 million from the
recognition of previously deferred revenue, net of current period
deferrals. The increase for the six-month period includes
approximately $20 million primarily from increased associate vendor
employees on assignment and to a lesser extent from increased
technology consulting and outsourcing services and solutions
revenues in addition to the recognition of previously deferred
revenue, net of current period deferrals.
On average, approximately 31,000 U.S. staffing employees were on
assignment in the quarter compared to approximately 30,900 in the
second quarter of 2011, and 31,200 for the first six months
compared to 31,600 in the prior year six-month period.
The Telecommunications Services and Other segments both reported
close to break-even operating results for the second quarters and
first six months of both 2012 and 2011. Results for the Computer
Systems Segment will be reported after the ongoing accounting
review and anticipated restatement is completed.
Liquidity
During the first six months of 2012, the Company disbursed
approximately $18 million in connection with the restatement and
related investigations and used approximately $2 million in all
other operating activities, used approximately $5 million for net
capital expenditures, and disbursed approximately $2 million for
the acquisition of an additional 10% interest in a foreign
subsidiary. Borrowings under the accounts receivable securitization
program increased by approximately $10 million during the first six
months of 2012 and borrowings under all other credit facilities
increased approximately $2 million. The Company transferred
approximately $1 million during the first six months of 2012 to
restricted cash as collateral for foreign currency borrowings and
banking facilities.
On April 29, 2012, the Company had cash and cash equivalents of
approximately $29 million and an additional approximately $36
million of cash set aside and restricted as collateral for foreign
currency credit lines and banking facilities. The Company also had
approximately $50 million available from its accounts receivable
securitization program. Excluding the approximately $9 million of
non-current debt, the Company’s consolidated borrowings were
approximately $126 million at April 29, 2012, which included
approximately $25 million of primarily foreign currency borrowings
used to hedge foreign denominated receivables and fully
collateralized by the restricted cash, and approximately $100
million drawn under the $150 million securitization program. The
amount drawn under the securitization program was subsequently
increased to approximately $120 million in May 2012. The increase
in borrowings was primarily the result of the increase in Staffing
revenues and related receivables, as payroll expenditures precede
collections from customers, and also expenditures for the
restatement and related investigations.
The Company believes that it has sufficient 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)
Six
Months Ended Three Months Ended
April 29,
2012
May 1,
2011
April 29,
2012
May 1,
2011
Cash and cash equivalents at beginning
of the period
$44,568 $51,084 $46,648 $71,210
Cash used in connection with
restatement and related
investigations
(18,424) (25,901) (7,918) (15,741)
Net cash (used in ) provided by all
other
operating activities
(1,734) 10,468 (27,811) (24,516) Net cash used in operating
activities (20,158) (15,433) (35,729) (40,257) Net cash used
in investing activities (6,642) (8,213) (2,386) (3,599)
Net cash restricted as collateral for
borrowings
(1,355) 642 (18) 1,311
Net cash provided by all other
financing
activities
12,260 9,923 20,158 9,338 Net cash provided by financing activities
10,905 10,565 20,140 10,649 Net decrease in cash and cash
equivalents (15,895) (13,081) (17,975) (33,207)
Cash and cash equivalents at end of
the
period
$28,673 $38,003 $28,673 $38,003
Note: Due to the ongoing accounting review and anticipated
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)
April 29,
2012
October 30,
2011
Cash and cash equivalents $28,673 $44,568 Cash restricted as
collateral for borrowings 35,545 34,190 Short-term investments
5,541 5,511
Total cash, cash restricted for borrowings
and short-term
investments
$69,759 $84,269
Short-term borrowings, including current
portion of long-term
debt
Accounts receivable securitization program $100,000 $90,000 Bank
loans and other 25,960 23,330 Long-term debt, excluding current
portion 9,459 9,817 Total short-term borrowings and long-term debt
$135,419 $123,147
Note: Due to the ongoing accounting review and anticipated
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 2012, 2011, 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 2012, 2011, 2010 and 2009 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 2012, 2011, 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 such related periods.
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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