Volt Information Sciences, Inc. (NYSE-MKT: VISI), an
international provider of staffing services and information
technology infrastructure services, today reported results for its
third quarter ended August 2, 2015. Key elements include:
- Net revenue of $364.7 million down
13.7% year-over-year
- Net loss of $4.1 million, or $0.7
million excluding special items
- Completed the sale of Volt Directories
S.A. Ltd. and Tainol S.A., the Company’s Uruguayan publishing and
printing business
- Subsequent to the end of the quarter,
completed the sale of certain assets of Volt Telecommunications
Group
- Established a new one-year $150.0
million Short-Term Financing Program with PNC Bank, which increased
borrowing capacity
“I look forward to building on the strengths of our business to
achieve our longer-term goal of returning Volt to profitable
growth,” commented Michael Dean, Chairman, Interim President and
CEO. “During the third quarter we made good progress on our
strategic initiative to divest non-core assets with the completion
of the sale of our unprofitable Uruguayan publishing and printing
business. Subsequent to the end of the quarter we also completed
the sale of certain assets of Volt Telecommunications Group, which
will further enhance our operational focus on our core staffing
business and improve profitability in the future. In addition, our
efforts to improve our balance sheet and strengthen our liquidity
position continue to bear fruit with the closing of a new one-year,
$150.0 million short-term financing program with PNC Bank. I am
also pleased with our ongoing initiatives to reduce expenses and
improve our cost structure, as evidenced by the decrease in
selling, administrative and other operating costs of $3.8 million,
or 7.0%, compared to the third quarter last year.”
Mr. Dean concluded, “We are actively pursuing advanced
technologies and improving business processes to support our core
staffing business. Our management team is energized, excited and
working with a sense of urgency to address the challenges that face
us and to capitalize on the opportunities that lie ahead. With the
recent changes in Volt’s leadership, we are taking a fresh look at
how we operate and by empowering our employees to make positive
changes, I believe these actions will lead to a significant
improvement in our financial performance in the quarters and years
ahead.”
Fiscal 2015 Third Quarter Results
Total revenue for the fiscal 2015 third quarter was $364.7
million compared to $422.6 million for the third quarter of fiscal
2014. Staffing Services segment revenue decreased to $341.4 million
from $397.0 million in the same period last year, while Other
segment revenue was $23.3 million in the third quarter compared to
$25.7 million in the third quarter last year.
Staffing Services segment operating income in the third quarter
of 2015 of $3.4 million included $2.5 million of special items
related to impairment charges and restructuring costs. Excluding
the impact of these special items, Staffing Services segment
operating income would have been $5.9 million on a Non-GAAP
basis.
Loss from continuing operations in the fiscal 2015 third quarter
of $4.1 million included special items of $3.4 million. Excluding
these items loss from continuing operations for the third quarter
of 2015 would have been $0.7 million on a Non-GAAP basis.
Adjusted EBITDA, which is also a non-GAAP measure, was $3.4
million in the fiscal 2015 third quarter. Adjusted EBITDA excludes
the impact of interest expense, income tax expense, depreciation
and amortization expense, other income/loss and share-based
compensation expense. For a reconciliation of the GAAP and non-GAAP
financial results, please see the tables at the end of this press
release.
Fiscal 2015 Year-to-Date Results
Total revenue for the first nine months of fiscal 2015 was
$1,132.9 million compared to $1,280.4 million for the first nine
months of fiscal 2014. Staffing Services segment revenue decreased
to $1,064.5 million from $1,196.0 million in the same period last
year, while Other segment revenue was $68.4 million in the first
nine months compared to $84.4 million in the comparable period last
year.
Loss from continuing operations in the first nine months of
fiscal 2015 of $19.9 million included special items of $13.4
million. Excluding these items the loss from continuing operations
in 2015 would have been $6.5 million on a Non-GAAP basis.
Short-Term Financing Program
On August 1, 2015, the Company entered into a one-year, $150.0
million Short-Term Financing Program with PNC Bank, National
Association (“PNC”) with an expiration date of July 28, 2016. This
program replaced the Company’s previous short-term financing
program. Proceeds from the new program were used to satisfy the
outstanding balance under the previous program. Borrowing capacity
will increase by at least $24.0 million resulting primarily from
the inclusion of receivables in the United Kingdom and Canada. The
Company will utilize available borrowing capacity, as needed, to
provide funding for working capital purposes in addition to funding
ongoing and future strategic initiatives.
On September 4, 2015, the Company had available liquidity of
approximately $46.1 million.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal
2015 third quarter financial results will be held today at 5:00
p.m. Eastern / 2:00 p.m. Pacific. Volt’s Chairman, Interim
President and CEO Michael Dean and CFO Paul Tomkins will host the
conference call. Participants can listen in via webcast by visiting
the Investor & Governance section of Volt’s website at
www.volt.com. Please go to the website at least 15 minutes early to
register, download and install any necessary audio software.
The conference call can also be accessed by dialing 877-407-9039
(201-689-8470 for international callers) and reference the "Volt
Information Sciences Earnings Conference Call." Following the call,
an audio replay will also be available by calling 877-870-5176 or
+1 858-384-5517 and entering the Conference ID# 13619056. A replay
of the webcast will also be available for 90 days upon completion
of the call, accessible through the Company's website
at www.volt.com in the Investors & Governance
section.
About Volt Information Sciences, Inc.
Volt Information Sciences, Inc. is an international provider of
staffing services (traditional time and materials based as well as
project based) and information technology infrastructure services.
Our staffing services consists of workforce solutions that include
providing contingent workers, personnel recruitment services, and
managed staffing services programs supporting primarily
professional administration, technical, information technology,
light-industrial and engineering positions. Our project-based
staffing assists with individual customer assignments as well as
customer care call centers and gaming industry quality assurance
testing services, and our managed service programs consist of
managing the procurement and on-boarding of contingent workers from
multiple providers. Our information technology infrastructure
services provide server, storage, network and desktop IT hardware
maintenance, data center and network monitoring and operations. For
more information visit www.volt.com.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to a number of known and unknown risks, including, among
others, 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. Copies of the
company’s latest Annual Report on Form 10-K and subsequent
Quarterly Reports on Form 10-Q, as filed with the Securities and
Exchange Commission, are available without charge upon request to
Volt Information Sciences, Inc., 1065 Avenue of the Americas, New
York, New York 10018, Attention: Shareholder Relations,
212-704-7921. These and other SEC filings by the company are also
available to the public over the Internet at the SEC’s website at
http://www.sec.gov and at the company’s website at
http://www.volt.com in the Investor & Governance section.
--Financial Tables to Follow--
Condensed Consolidated
Results of Operations by Segment Unaudited (in
thousands)
Results of Operations by Segment (Third Quarter 2015 vs. Third
Quarter 2014) Three months ended August 2, 2015
Three months ended August 3, 2014 Total
Staffing
Services
Other Total
Staffing
Services
Other Revenue Staffing services revenue
$ 341,383 $ 341,383 $ - $ 396,979 $ 396,979 $ - Other revenue
23,285 -
23,285 25,670 -
25,670
Net revenue 364,668
341,383 23,285 422,649 396,979
25,670 Expenses Direct cost of staffing
services revenue 288,689 288,689 - 337,285 337,285 - Cost of other
revenue 19,696 - 19,696 22,319 - 22,319 Selling, administrative and
other operating costs 50,955 46,792 4,163 54,809 50,447 4,362
Restructuring costs 400 341 59 141 42 99 Impairment charges
580 2,130 (1,550 )
- - -
Segment operating income (loss) 4,348 3,431 917 8,095 9,205
(1,110 ) Corporate general and administrative 5,935 3,022 Corporate
restructuring costs 1,467 -
Operating income (loss) (3,054 ) 5,073
Other income (expense), net 261 (930 ) Income tax provision
1,351 738
Income (loss) from continuing
operations (4,144 ) 3,405 Loss from
discontinued operations, net of taxes - (3,885
)
Net loss $ (4,144 ) $
(480 ) Per Share Data:
Basic: Income (loss) from continuing operations $ (0.20 ) $
0.16 Loss from discontinued operations - (0.19
)
Net loss $ (0.20 ) $
(0.03 ) Weighted average number of shares 20,741
20,866
Diluted: Income (loss) from continuing
operations $ (0.20 ) $ 0.16 Loss from discontinued operations
- (0.18 )
Net loss $
(0.20 ) $ (0.02 ) Weighted
average number of shares 20,741 21,072
Condensed Consolidated Results of
Operations by Segment Unaudited (in thousands)
Results of Operations
by Segment (Nine Months 2015 vs. Nine Months 2014)
Nine months ended August 2, 2015 Nine months ended August
3, 2014 Total
Staffing
Services
Other Total
Staffing
Services
Other Revenue Staffing services revenue
$ 1,064,481 $ 1,064,481 $ - $ 1,195,981 $ 1,195,981 $ - Other
revenue 68,442 - 68,442
84,376 - 84,376
Net revenue
1,132,923 1,064,481 68,442 1,280,357
1,195,981 84,376 Expenses Direct cost of
staffing services revenue 904,624 904,624 - 1,022,003 1,022,003 -
Cost of other revenue 59,210 - 59,210 70,518 - 70,518 Selling,
administrative and other operating costs 159,221 147,406 11,815
173,414 159,947 13,467 Restructuring costs 651 616 35 1,477 1,276
201 Impairment charges 5,954 3,107
2,847 - - - Segment operating
income (loss) 3,263 8,728 (5,465 ) 12,945 12,755 190 Corporate
general and administrative 15,291 10,642 Corporate restructuring
costs 2,442 320 Restatement, investigations and remediation
- 3,261
Operating loss (14,470
) (1,278 ) Other income (expense), net (2,125
) (2,556 ) Income tax provision 3,262 4,062
Loss from continuing operations (19,857
) (7,896 ) Loss from discontinued operations,
net of taxes (4,519 ) (13,153 )
Net loss
$ (24,376 ) $ (21,049 )
Per Share Data: Basic: Loss from continuing
operations $ (0.95 ) $ (0.38 ) Loss from discontinued operations
(0.22 ) (0.63 )
Net loss $ (1.17
) $ (1.01 ) Weighted average number of
shares 20,821 20,859 Diluted: Loss from continuing
operations $ (0.95 ) $ (0.38 ) Loss from discontinued operations
(0.22 ) (0.63 )
Net loss $ (1.17
) $ (1.01 ) Weighted average number of
shares 20,821 20,859
Condensed Consolidated
Statements of Cash Flows Unaudited (in thousands)
Nine months ended August 2, 2015
August 3, 2014 Cash and cash equivalents, beginning of
the period $ 9,105 $ 9,847
Changes in operating assets and liabilities 21,086 28,202 Cash
(used in) provided by all other operating activities (7,017
) 1,868
Net cash provided by operating
activities 14,069 30,070
Net cash used in investing activities
(4,301 ) (84 ) Net
release of cash restricted as collateral for borrowings 10,436
6,807 Net change in short-term borrowings (3,506 ) (24,853 )
Purchases of common stock under repurchase program (4,262 ) - Net
cash used in all other financing activities (172 )
(623 )
Net cash provided by (used in) financing activities
2,496 (18,669 )
Effect of exchange rate changes on cash and cash equivalents
(3,679 ) (104 ) Net cash used
in discontinued operations (4,056 )
(11,878 ) Net increase (decrease) in
cash and cash equivalents 4,529
(665 ) Change in cash from discontinued
operations (211 ) 188
Cash and cash equivalents, end of the period $
13,423 $ 9,370 Cash
paid during the period: Interest $ 2,435 $ 2,729 Income taxes $
1,638 $ 3,985
Condensed Consolidated
Balance Sheets (in thousands, except share amounts)
August 2, 2015 November 2, 2014 ASSETS
(unaudited)
CURRENT ASSETS: Cash and cash equivalents $
13,423 $ 9,105 Restricted cash and short-term investments 12,196
32,436 Trade accounts receivable, net of allowances of $828 and
$868, respectively 210,626 248,101 Recoverable income taxes 16,439
18,311 Prepaid insurance and other current assets 24,569 26,255
Assets held for sale - 24,220
TOTAL
CURRENT ASSETS 277,253 358,428 Prepaid insurance
and other assets, excluding current portion 42,518 39,600 Property,
equipment and software, net 22,772 26,304
TOTAL ASSETS $ 342,543 $
424,332 LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES: Accrued compensation $
34,141 $ 41,182 Accounts payable 35,196 55,873 Accrued taxes other
than income taxes 19,734 17,099 Accrued insurance and other 35,080
39,104 Deferred revenue, net, current portion 1,855 3,491
Short-term borrowings, including current portion of long-term debt
125,968 129,417 Liabilities held for sale -
19,126
TOTAL CURRENT LIABILITIES 251,974
305,292 Accrued insurance and other, excluding current
portion 10,502 11,874 Income taxes payable, excluding current
portion 8,738 8,556 Long-term debt, excluding current portion
6,482 7,216
TOTAL LIABILITIES
277,696 332,938 Commitments and contingencies
STOCKHOLDERS' EQUITY: Preferred stock, par value
$1.00; Authorized - 500,000 shares; Issued – none - -
Common stock, par value $0.10; Authorized
- 120,000,000 shares; Issued - 23,738,003 and 23,610,103,
respectively; Outstanding – 20,796,780 and 20,922,796,
respectively
2,374 2,361 Paid-in capital 75,461 73,194 Retained earnings 38,293
64,119 Accumulated other comprehensive loss (7,442 ) (6,400 )
Treasury stock, at cost; 2,941,223 shares and 2,687,307 shares,
respectively (43,839 ) (41,880 )
TOTAL
STOCKHOLDERS' EQUITY 64,847
91,394 TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 342,543 $ 424,332
Unaudited Non-GAAP
Statement of Operations and Reconciliations (in thousands,
except earnings per share)
Three Months Ended August 2, 2015 Three
Months Ended August 3, 2014 GAAP Special Items
Ref Non-GAAP GAAP Special Items
Ref Non-GAAP Revenue: Staffing services
revenue $ 341,383 $ - $ 341,383 $ 396,979 $ - $ 396,979 Other
revenue 23,285 - 23,285
25,670 - 25,670 Net
Revenue 364,668 - 364,668 422,649 - 422,649 Expenses: Direct
cost of staffing services revenue 288,689 - 288,689 337,285 -
337,285 Cost of other revenue 19,696 - 19,696 22,319 - 22,319
Selling, administrative and other operating costs 56,890 (1,976 )
(a) 54,914 57,831 - 57,831 Restructuring costs 1,867 (1,867 ) (b) -
141 (141 ) (e) - Impairment charges 580 (580 )
(c) - - - Total
Expenses 367,722 (4,423 ) 363,299 417,576 (141 ) 417,435
Operating income (loss) (3,054 )
4,423 1,369 5,073 141 5,214 Other income (expense), net
Interest income (expense), net (571 ) - (571 ) (788 ) - (788 )
Foreign exchange gain (loss), net 1,010 (1,010 ) (d) - (134 ) 134
(d) - Other income (expense), net (178 ) -
(178 ) (8 ) - (8 ) Total other
income (expense), net 261 (1,010 ) (749 ) (930 ) 134 (796 )
Income (loss) from continuing
operations before income taxes (2,793 ) 3,413 620 4,143 275 4,418
Income tax provision 1,351 -
1,351 738 - 738
Income (loss) from continuing operations $ (4,144 ) $ 3,413
$ (731 ) $ 3,405 $ 275 $ 3,680 * Basic
income (loss) from continuing operations $ (0.20 ) $ 0.16 $ (0.04 )
$ 0.16 $ 0.01 $ 0.18 * Diluted income (loss) from continuing
operations $ (0.20 ) $ 0.16 $ (0.04 ) $ 0.16 $ 0.01 $ 0.17
Basic weighted average number of shares 20,741 20,741 20,741 20,866
20,866 20,866 Diluted weighted average number of shares 20,741
20,741 20,741 21,072 21,072 21,072
Special item
adjustments consist of the following: (a) Relates
primarily to stock-based compensation granted to our new Board of
Directors of $1.5 million and $0.5 million of legal and other
items. (b) Relates primarily to severance charges associated with
the departure of our former Chief Executive Officer ($1.5 million).
(c) Relates primarily to the impairment of capitalized internally
developed software as well as an adjustment to the impairment of
net assets. (d) Relates to non-cash foreign exchange translation
gain or loss on our intercompany balances. (e) Relates to severance
charges primarily in our Other segment. * Earnings per share
may not add in certain periods due to rounding.
Unaudited Non-GAAP Statement of Operations
and Reconciliations (in thousands, except earnings per
share) Nine
Months Ended August 2, 2015 Nine Months Ended August 3,
2014 GAAP Special Items Ref
Non-GAAP GAAP Special Items Ref
Non-GAAP Revenue: Staffing services revenue $
1,064,481 $ - $ 1,064,481 $ 1,195,981 $ - $ 1,195,981 Other revenue
68,442 - 68,442
84,376 - 84,376 Net revenue
1,132,923 - 1,132,923 1,280,357 - 1,280,357 Expenses: Direct
cost of staffing services revenue 904,624 - 904,624 1,022,003 -
1,022,003 Cost of other revenue 59,210 - 59,210 70,518 - 70,518
Selling, administrative and other operating costs 174,512 (4,180 )
(a) 170,332 184,056 (500 ) (e) 183,556 Restructuring costs 3,093
(3,093 ) (b) - 1,797 (1,797 ) (f) - Impairment charges 5,954 (5,954
) (c) - - - - Restatement, investigations and remediation -
- - 3,261
(3,261 ) - Total expenses 1,147,393 (13,227 )
1,134,166 1,281,635 (5,558 ) 1,276,077 Operating income
(loss) (14,470 ) 13,227 (1,243 ) (1,278 ) 5,558 4,280 Other
income (expense), net Interest income (expense), net (1,935 ) -
(1,935 ) (2,450 ) - (2,450 ) Foreign exchange gain (loss), net (153
) 153 (d) - (376 ) 376 (d) - Other income (expense), net (37
) - (37 ) 270 -
270 Total other income (expense), net (2,125 ) 153
(1,972 ) (2,556 ) 376 (2,180 )
Income (loss) from continuing operations before income taxes
(16,595 ) 13,380 (3,215 ) (3,834 ) 5,934 2,100 Income tax provision
3,262 - 3,262
4,062 - 4,062 Income (loss) from
continuing operations $ (19,857 ) $ 13,380 $ (6,477 ) $
(7,896 ) $ 5,934 $ (1,962 ) * Basic income (loss)
from continuing operations $ (0.95 ) $ 0.64 $ (0.31 ) $ (0.38 ) $
0.28 $ (0.09 ) * Diluted income (loss) from continuing operations $
(0.95 ) $ 0.64 $ (0.31 ) $ (0.38 ) $ 0.28 $ (0.09 ) Basic
weighted average number of shares 20,821 20,821 20,821 20,859
20,859 20,859 Diluted weighted average number of shares 20,821
20,821 20,821 20,859 20,859 20,859
Special item
adjustments consist of the following: (a)
Relates primarily to stock-based
compensation granted to our new Board of Directors of $1.5 million,
costs incurred with responding to activist shareholders and related
Board of Directors search fees as well as legal and other
items.
(b) Relates primarily to severance charges associated with the
departure of our former Chief Executive Officer and Chief Financial
Officer. (c)
Relates primarily to capitalized
internally developed software, impairment of net assets in our
publishing and printing business in Uruguay as well as impairment
of goodwill related to our staffing business in Uruguay.
(d) Relates to non-cash foreign exchange translation gain or loss
on our intercompany balances. (e) Relates to special bonus provided
to our Chief Financial Officer for the filing of our 2011 and 2012
Form 10-K. (f) Relates to severance charges primarily in our
Staffing segment from our divestiture of ProcureStaff and our
traditional staffing restructuring. * Earnings per share may
not add in certain periods due to rounding.
Unaudited Reconciliation of Non-GAAP Income (Loss) from
Continuing Operations to Adjusted EBITDA (in
thousands)
Three Months Ended
August 2, 2015 August 3, 2014 Non-GAAP income
(loss) from continuing operations $ (731 ) $ 3,680
Adjustments: Depreciation and amortization 1,700 1,953 Share-based
compensation expense (a) 340 72 Other (income) loss, net (b) 749
796 Provision for income taxes 1,351 738
Adjusted EBITDA $ 3,409 $ 7,239
Nine
Months Ended August 2, 2015 August 3, 2014
Non-GAAP income (loss) from continuing operations $ (6,477 ) $
(1,962 ) Adjustments: Depreciation and amortization 5,110
7,218 Share-based compensation expense (a) 1,058 398 Other (income)
loss, net (b) 1,972 2,180 Provision for income taxes 3,262
4,062 Adjusted EBITDA $ 4,925 $ 11,896
(a)
Excludes stock-based compensation granted
to our new Board of Directors
(b)
Includes interest income (expense) and
other income (expense), net
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain non-GAAP financial information,
which includes adjustments for special items, as additional
information for its consolidated income (loss) from continuing
operations, segment operating income (loss) and adjusted EBITDA.
These measures are not in accordance with, or an alternative for,
generally accepted accounting principles (“GAAP”) and may be
different from Non-GAAP measures reported by other companies. The
Company believes that the presentation of these Non-GAAP measures
provides useful information to management and investors regarding
certain financial and business trends relating to its financial
condition and results of operations because it permits evaluation
of the results of the Company’s continuing operations without the
effect of special items that management believes make it more
difficult to understand and evaluate the Company’s results of
operations.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150910006658/en/
Investor Contacts:Volt Information Sciences, Inc.Paul
Tomkins212-704-7921voltinvest@volt.comorAddo CommunicationsLasse
Glassen424-238-6249lasseg@addocommunications.com
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