Volt Information Sciences, Inc. (OTC: VISI) announced the
extension to December 31, 2013 of the financing facility and the
requirement to provide audited financial statements for its fiscal
years 2011 and 2012 under its Short-Term Financing Program (“Short
Term Financing Program”). The underlying borrowing agreement was
also extended to December 31, 2014 from its previous July 31, 2014
expiration date. The Company’s Short-Term Financing Program
provides for borrowing secured by receivables related to its
staffing services business.
The Company also today provided a business update and reported
selected unaudited financial information for its fiscal second
quarter and first fiscal six months of 2013 ended April 28, 2013.
The Company noted that due to the previously announced ongoing
accounting review and the recent restatement of prior years filed
with the Fiscal 2010 Form 10-K, 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 $473 million of
revenue in the second quarter 2013, a decrease of approximately $45
million compared to the same period in 2012. The second quarter of
2012 included recognition of approximately $12 million of
previously deferred revenue, net of current period deferrals.
Adjusting to recognize deferred revenue on a proforma basis in the
period the related expenses were incurred, Staffing Services
segment proforma net revenue decreased by approximately $30 million
or 5.9%, from $506 million to $476 million for the three-month
period.
For the first six months of 2013, the Staffing Services Segment
had approximately $948 million of revenue, a decrease of
approximately $48 million compared to the same period in fiscal
2012. Adjusting to recognize deferred revenue on a proforma basis
in the period the related expenses were incurred, Staffing Services
segment proforma net revenue decreased by approximately $34 million
or 3.5%, from $982 million to $948 million for the six month
period.
The decrease in revenues for both the three and six month
periods was primarily due to the Company’s strategic initiative to
review customer accounts for profitability and renegotiate or exit
unprofitable customer accounts and for the six month period a
reduction in associate vendor staff on assignment. These decreases
were partially offset by additional revenues from new and existing
customers at lower average bill rates.
The Telecommunications Services segment reported a small
operating loss for the second quarters and first six months of both
2013 and 2012 while close to breakeven results were reported from
the Other segment for the second quarters of both 2013 and 2012,
and a small operating profit compared to close to breakeven
operating results for the Other segment in the first six months of
both fiscal years. Revenue for the Computer Systems segment will be
reported after the ongoing audits are completed and comprehensive
financial reports filed.
Liquidity
During the first six months of fiscal 2013, the Company
disbursed approximately $23 million in connection with the
restatement and related investigations, generated approximately $23
million from all other operating activities, increased borrowings
under the Company’s short-term financing program by approximately
$10 million (to approximately $130 million) and used approximately
$4 million for capital expenditures. The Company’s restricted cash
used as collateral for foreign currency borrowings and banking
facilities decreased by approximately $4 million. The approximately
$130 million drawn under the Company’s short-term financing program
was subsequently increased to approximately $145 million in July
2013.
On April 28, 2013, the Company had cash and cash equivalents of
approximately $36 million and an additional approximately $31
million of cash restricted as collateral for foreign currency
credit lines and banking facilities. The Company also had
approximately $20 million available from its short-term financing
program. Excluding approximately $9 million of non-current debt,
the Company’s consolidated borrowings were approximately $156
million at April 28, 2013, which included approximately $22 million
of foreign currency borrowings used to hedge net investments in
foreign subsidiaries that are fully collateralized by restricted
cash, and approximately $130 million drawn under the $150 million
short-term financing program. As previously announced, the credit
available under the short-term financing program was increased to
$200 million in May 2013. The Company believes that it has
sufficient liquidity to meet its business requirements at current
levels.
VOLT INFORMATION SCIENCES, INC.
Condensed Statements of
CashFlows Unaudited, Estimated(in Thousands)
Three Months Ended Six Months Ended April 28,2013
April 29,2012
April 28,2013
April 29,2012
Cash and cash equivalents atbeginning of
the period
$ 25,753 $ 46,647 $ 26,731 $ 44,568
Cash used in connection withrestatement
and relatedinvestigations
(8,279 ) (7,918 ) (23,462 ) (18,424 )
Net cash (used in) providedby all other
operatingactivities
(3,550 ) (27,597 )
22,952
(1,729 )
Net cash used in operatingactivities
(11,829 ) (35,515 ) (510 ) (20,153 )
Net cash used in investingactivities
(1,837 )
(2,571 )
(3,982 ) (6,633 )
Net cash restricted ascollateral for
borrowings
4,293 (18 ) 4,269 (1,355 )
Net cash provided by allother financing
activities
19,778 20,130
9,650
12,246
Net cash provided by
financingactivities
24,071 20,112 13,919 10,891
Net increase (decrease) in cashand cash
equivalents
10,405 (17,974 )
9,427
(15,895 )
Cash and cash equivalents atend of the
period
$ 36,158 $ 28,673
$ 36,158 $
28,673
Supplemental information:
Cash paid during the period for:
Interest
$
703
$
697
$
1,411
$
1,394
Income taxes
$
665
$
862
$
8,869
$
1,778
Borrowing and Cash Positions (in
Thousands)
April 28,2013
October 28,2012 Cash and cash equivalents $ 36,158 $ 26,731
Cash restricted as collateral for borrowings 31,312 35,581
Short-term investments 5,954 5,611
Total cash, cash restricted for borrowings
and short-terminvestments
$ 73,424 $ 67,923
Short-term borrowings, including current
portion of long-termdebt
Short-term financing program $ 130,000 $ 120,000 Bank loans and
other 25,771 25,727 Long-term debt, excluding current portion
8,624 9,033 Total short-term borrowings and long-term
debt $ 164,395 $ 154,760
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 upon the completion of the audit
of the Company’s fiscal 2013, 2012 and 2011 annual financial
statements by the Company’s independent accountants. The Company is
in the process of completing its fiscal 2012 and 2011 annual
financial statement audits after recently restating prior years’
financial statements for fiscal year 2008 due to the correction of
errors in the application of certain accounting principles and
methodologies. There can be no assurance that the amounts reported
today will not differ, including materially, from those reported
when the Company files its 2013, 2012 and 2011 Form 10-Ks and other
reports.
Since the audits are 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 and 2011 until its independent
accountants have completed their audit procedures, and 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.
Volt Information Sciences, Inc.James Whitney,
212-704-7921voltinvest@volt.com
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