Volt Information Sciences, Inc. (NYSE-MKT: VISI), a
global provider of staffing services and information technology
infrastructure services, today reported results for its fourth
quarter and full year ended November 1, 2015. Key elements
include:
- Fourth quarter net revenue of $364.0
million down 0.2% compared to the prior quarter and down 15.3%
year-over-year; Full year net revenue of $1,496.9 million down
12.5% year-over-year
- Fourth quarter income from continuing
operations of $0.1 million or $1.0 million excluding special items;
Full year loss from continuing operations of $19.8 million, or $5.5
million excluding special items
- Significant progress in ongoing efforts
to sell non-core operations during fiscal 2015 including the sale
of substantially all of the assets of Volt Telecommunications Group
in the fourth quarter, the sale of the Uruguayan publishing and
printing business in the third quarter and sale of the computer
systems business in the first quarter. Subsequent to the end of the
fourth quarter, the Company completed the sale of its Uruguayan
staffing business and today announced plans to sell Maintech, its
IT infrastructure services business
- Subsequent to the end of the fourth
quarter, the Company implemented a cost reduction plan that
included a reduction in workforce of approximately 200 employees.
Estimated restructuring charges are expected to be $3.0 million
throughout fiscal 2016, with estimated annual cost savings of $10
million
- Subsequent to the end of the fourth
quarter, the Company entered into a one-year extension of its
$150.0 million Financing Program with PNC Bank, National
Association (“PNC”) with an expiration date of January 31,
2017
Commenting on Volt’s fourth quarter results, Michael Dean,
President and CEO, said, “We ended fiscal 2015 with a productive
fourth quarter. We have made meaningful progress in our efforts to
stabilize Volt’s financial performance. We were successful in
maintaining our book of business and our fourth quarter revenues
held steady compared to the prior quarter. Importantly, we also
made significant progress on our strategic initiatives to divest
non-core assets with the sale of substantially all of the assets of
Volt Telecommunications Group and more recently, our Uruguayan
staffing business. I’m also pleased to announce that we have
commenced the sale process for our last remaining non-core
business, Maintech. The divestiture of these assets will enable us
to better focus management’s attention on resources and
opportunities within our core staffing business where we believe we
are better positioned to add value.”
Mr. Dean concluded, “In the fourth quarter, we took concrete
steps towards advancing our plan to shore up our balance sheet and
provide the foundation for returning Volt to profitable growth. We
remain focused on strengthening our liquidity position, reducing
expenses and improving our cost structure, as well as reinvesting
in the growth of our business. I am confident our efforts will lead
to a significant improvement in our financial and operational
performance going forward.”
Fiscal 2015 Fourth Quarter Results
Total revenue for the fiscal 2015 fourth quarter was $364.0
million, down $0.7 million or 0.2% compared to $364.7 million for
the third quarter of fiscal 2015. Compared to the prior year
period, total revenue decreased $65.7 million, or 15.3% compared to
net revenues of $429.7 million for the fourth quarter of fiscal
2014.
Staffing Services segment revenue was $342.3 million, a $0.9
million or 0.3% increase compared to $341.4 million for the third
quarter of fiscal 2015. Compared to the prior year period, Staffing
Services segment revenues declined $60.8 million, or 15.1% compared
to Staffing Services revenues of $403.1 million in the fourth
quarter of fiscal 2014. Other segment revenue was $21.6 million in
the fourth quarter of fiscal 2015, compared to $23.3 million in the
third quarter and $26.6 million in the prior year period.
Staffing Services segment operating income in the fourth quarter
of fiscal 2015 of $5.6 million included $1.2 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 $6.8 million on a Non-GAAP
basis.
Income from continuing operations in the fiscal 2015 fourth
quarter of $0.1 million included special items of $0.9 million.
Excluding these items income from continuing operations for the
fourth quarter of 2015 would have been $1.0 million on a Non-GAAP
basis.
Adjusted EBITDA, which is also a Non-GAAP measure, was $5.3
million in the fiscal 2015 fourth 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 Full Year Results
Total revenue for the full year of fiscal 2015 was $1,496.9
million, down $213.1 million, or 12.5% compared to $1,710.0 million
for the full year of fiscal 2014. Staffing Services segment revenue
decreased to $1,406.8 million, a decline of $192.2 million, or
12.0% compared to revenues of $1,599.0 million in the same period
last year. Other segment revenue was $90.1 million compared to
$111.0 million in the comparable period last year.
Loss from continuing operations in fiscal 2015 of $19.8 million
included special items of $14.3 million. Excluding these items, the
loss from continuing operations in 2015 would have been $5.5
million on a Non-GAAP basis.
Liquidity
As of November 1, 2015, the Company had $49.4 million of
available liquidity for working capital requirements. As of January
8, 2016, the Company had available liquidity of approximately $53.1
million.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal
2015 fourth quarter and full year financial results will be held
today at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time. Volt’s
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 877-407-9712
(201-689-8323 for international callers) and reference the "Volt
Information Sciences Earnings Conference Call."
Following the call, an audio replay will be available beginning
Wednesday, January 13, 2016 at 8:00 p.m. Eastern Time through
Wednesday, January 27, 2016 at 11:59 p.m. Eastern Time. To access
the replay, dial 877-870-5176 (858-384-5517 for international
callers) and enter the Conference ID #13627494. 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 a global provider of staffing
services (traditional time and materials-based as well as
project-based), managed service programs, technology outsourcing
services and information technology infrastructure services. Our
staffing services consists of workforce solutions that include
providing contingent workers, personnel recruitment services, and
managed services programs supporting primarily professional
administration, technical, information technology, light-industrial
and engineering positions. Our managed service programs consist of
managing the procurement and on-boarding of contingent workers from
multiple providers. Our technology outsourcing services provide pre
and post production development, testing and customer support to
companies in the mobile, gaming, and technology devices industries.
In addition, we provide information technology infrastructure
services which provide server, storage, network and desktop IT
hardware maintenance, data center and network monitoring and
operations. Our complementary businesses offer customized talent,
technology and consulting solutions to a diverse client base. Volt
services global industries including aerospace, automotive, banking
and finance, consumer electronics, information technology,
insurance, life sciences, manufacturing, media and entertainment,
pharmaceutical, software, telecommunications, transportation, and
utilities. 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., 1133 Avenue of the Americas, New
York, New York 10036, 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--
Results of Operations (in thousands, except per share
data) Three Months Ended (unaudited)
Year Ended November 1, 2015 August
2, 2015 November 2, 2014 November 1, 2015
November 2, 2014 Revenue: Staffing
services revenue $ 342,328 $ 341,383 $ 403,065 $ 1,406,809 $
1,599,046 Other revenue 21,646 23,285
26,606 90,088 110,982
Net revenue 363,974 364,668 429,671
1,496,897 1,710,028 Expenses: Direct
cost of staffing services revenue 288,368 288,689 337,045 1,192,992
1,359,048 Cost of other revenue 18,021 19,696 21,922 77,231 92,440
Selling, administrative and other operating costs 54,661 56,890
63,930 229,173 247,986 Restructuring costs 542 1,867 710 3,635
2,507 Impairment charges 672 580 - 6,626 - Restatement,
investigations and remediation - -
- - 3,261
Total
expenses 362,264 367,722 423,607
1,509,657 1,705,242 Operating income
(loss) 1,710 (3,054 ) 6,064
(12,760 ) 4,786 Interest income
(expense), net (737 ) (571 ) (813 ) (2,672 ) (3,263 ) Foreign
exchange gain (loss) (96 ) 1,010 494 (249 ) 118 Other income
(expense), net 578 (178 ) (72 )
541 198
Income (loss) from continuing
operations before income taxes 1,455 (2,793
) 5,673 (15,140 ) 1,839 Income
tax provision 1,384 1,351 1,164
4,646 5,226
Income (loss)
from continuing operations 71 (4,144 )
4,509 (19,786 ) (3,387 ) Loss
from discontinued operations (315 ) -
(2,448 ) (4,834 ) (15,601 )
Net income (loss)
$ (244 ) $ (4,144 )
$ 2,061 $ (24,620 )
$ (18,988 ) Per share data:
Basic: Income (loss) from continuing operations $ - $ (0.20
) $ 0.22 $ (0.95 ) $ (0.16 ) Loss from discontinued operations
(0.01 ) - (0.12 ) (0.23 )
(0.75 )
Net income (loss) $ (0.01 )
$ (0.20 ) $ 0.10 $
(1.18 ) $ (0.91 ) Weighted
average shares - basic 20,799 20,741 20,874 20,816 20,863
Income (loss) from continuing operations $ - $ (0.20 ) $ 0.21 $
(0.95 ) $ (0.16 ) Loss from discontinued operations (0.01 )
- (0.11 ) (0.23 ) (0.75 )
Net
income (loss) $ (0.01 ) $
(0.20 ) $ 0.10 $
(1.18 ) $ (0.91 ) Weighted
average shares - diluted 20,930 20,741 21,013 20,816 20,863
Sequential Results of Operations (in thousands)
Revenue: Staffing Services $ 342,328 $ 341,383 $
403,065 $ 1,406,809 $ 1,599,046 Other Segment 21,646
23,285 26,606 90,088
110,982
Net revenue $ 363,974
$ 364,668 $ 429,671
$ 1,496,897 $ 1,710,028
Operating income (loss): Staffing Services $
5,556 $ 3,431 $ 13,240 $ 14,284 $ 25,995 Other Segment 1,379 917
(940 ) (4,086 ) (750 ) Corporate general & administrative
(5,225 ) (7,402 ) (6,236 ) (22,958 )
(20,459 )
Operating income (loss) $
1,710 $ (3,054 ) $
6,064 $ (12,760 ) $
4,786 Condensed Consolidated Statements of
Cash Flows (in thousands) Year
ended November 1, 2015 November 2, 2014
Cash and cash equivalents, beginning of the period $
6,723 $ 8,855 Changes in
operating assets and liabilities 46,712 25,485 Cash (used in)
provided by all other operating activities (3,388 )
8,937
Net cash provided by operating activities
43,324 34,422
Net cash used in investing activities (7,428
) (1,281 ) Decrease in cash
restricted as collateral for borrowings 10,436 21,349 Net change in
borrowings (28,506 ) (38,637 ) Purchases of common stock under
repurchase program (4,262 ) - Net cash used in all other financing
activities (1,727 ) (1,072 )
Net cash used in
financing activities (24,059 )
(18,360 ) Effect of exchange rate changes
on cash and cash equivalents (924 ) (386
) Net cash used in discontinued operations
(7,237 ) (17,513 ) Net
increase (decrease) in cash and cash equivalents
3,676 (3,118 ) Change
in cash from discontinued operations (211
) 986 Cash and cash
equivalents, end of the period $ 10,188
$ 6,723 Cash paid during the
period: Interest $ 3,196 $ 3,539 Income taxes $ 3,315 $ 4,948
Condensed Consolidated Balance Sheets (in
thousands, except share amounts) November 1,
2015 November 2, 2014 ASSETS CURRENT
ASSETS: Cash and cash equivalents $ 10,188 $ 6,723 Restricted
cash and short-term investments 14,977 32,436 Trade accounts
receivable, net of allowances of $960 and $865, respectively
198,385 230,951 Recoverable income taxes 17,583 18,171 Prepaid
insurance and other current assets 15,865 24,869 Assets held for
sale 22,943 52,198
TOTAL CURRENT
ASSETS 279,941 365,348 Prepaid insurance and
other assets, excluding current portion 22,790 33,428 Property,
equipment and software, net 24,095 25,556
TOTAL ASSETS $ 326,826 $
424,332 LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES: Accrued compensation $
29,548 $ 37,671 Accounts payable 39,164 54,316 Accrued taxes other
than income taxes 22,719 15,985 Accrued insurance and other 33,178
37,822 Deferred revenue 1,213 1,857 Short-term borrowings,
including current portion of long-term debt 982 129,417 Income
taxes payable 1,658 - Liabilities held for sale 7,345
28,387
TOTAL CURRENT LIABILITIES
135,807 305,455 Accrued insurance and other,
excluding current portion 13,699 11,741 Income taxes payable,
excluding current portion 6,516 8,526 Long-term debt, excluding
current portion 106,313 7,216
TOTAL
LIABILITIES 262,335 332,938 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 – 20,801,080 and 20,922,796,
respectively
2,374 2,361 Paid-in capital 75,803 73,194 Retained earnings 38,034
64,119 Accumulated other comprehensive loss (7,994 ) (6,400 )
Treasury stock, at cost; 2,936,923 shares and 2,687,307 shares,
respectively (43,726 ) (41,880 )
TOTAL
STOCKHOLDERS' EQUITY 64,491
91,394 TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 326,826 $ 424,332
Unaudited Non-GAAP Statement of Operations and
Reconciliations (in thousands, except earnings per
share)
Three Months Ended November 1, 2015 Three Months Ended
November 2, 2014 GAAP Special Items Ref
Non-GAAP GAAP Special Items Ref
Non-GAAP Revenue: Staffing services revenue $ 342,328
$ - $ 342,328 $ 403,065 $ - $ 403,065 Other revenue 21,646
- 21,646 26,606
- 26,606 Net revenue 363,974 - 363,974
429,671 - 429,671 Expenses: Direct cost of staffing services
revenue 288,368 - 288,368 337,045 - 337,045 Cost of other revenue
18,021 - 18,021 21,922 - 21,922 Selling, administrative and other
operating costs 54,661 (368 ) (a) 54,293 63,930 (1,800 ) (f) 62,130
Restructuring costs 542 (542 ) (b) - 710 (710 ) (b) - Impairment
charges 672 (672 ) (c) -
- - Total expenses 362,264 (1,582 )
360,682 423,607 (2,510 ) 421,097
Operating income 1,710 1,582 3,292 6,064 2,510 8,574
Other income (expense), net: Interest income (expense), net (737 )
- (737 ) (813 ) - (813 ) Foreign exchange gain (loss) (96 ) 96 (d)
- 494 (494 ) (d) - Other income (expense), net 578
(764 ) (e) (186 ) (72 ) -
(72 ) Total other income (expense), net (255 ) (668 ) (923 ) (391 )
(494 ) (885 ) Income from
continuing operations before income taxes 1,455 914 2,369 5,673
2,016 7,689 Income tax provision 1,384 -
1,384 1,164 -
1,164 Income from continuing operations $ 71 $
914 $ 985 $ 4,509 $ 2,016 $ 6,525
* Basic income from continuing operations $ 0.00 $
0.04 $ 0.05 $ 0.22 $ 0.10 $ 0.31 * Diluted income from continuing
operations $ 0.00 $ 0.04 $ 0.05 $ 0.21 $ 0.10 $ 0.31 Basic
weighted average number of shares 20,799 20,799 20,799 20,874
20,874 20,874 Diluted weighted average number of shares 20,930
20,930 20,930 21,013 21,013 21,013
Special item
adjustments consist of the following: (a) Relates
primarily to CEO search fees. (b) Relates primarily to severance
charges associated with headcount reductions. (c) Relates to
impairment of net assets related to our staffing business in
Uruguay. (d) Relates primarily to non-cash foreign exchange gain or
loss on our intercompany balances. (e) Relates primarily to the
gain on sale of non-core operations. (f) Relates primarily to
workers compensation of $1.1 million and asset retirement
obligation of $0.7 million. * 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)
Twelve Months Ended November 1, 2015
Twelve Months Ended November 2, 2014 GAAP Special
Items Ref Non-GAAP GAAP Special
Items Ref Non-GAAP Revenue: Staffing
services revenue $ 1,406,809 $ - $ 1,406,809 $ 1,599,046 $ - $
1,599,046 Other revenue 90,088 -
90,088 110,982 - 110,982
Net revenue 1,496,897 - 1,496,897 1,710,028 - 1,710,028
Expenses: Direct cost of staffing services revenue 1,192,992
- 1,192,992 1,359,048 - 1,359,048 Cost of other revenue 77,231 -
77,231 92,440 - 92,440 Selling, administrative and other operating
costs 229,173 (4,548 ) (a) 224,625 247,986 (2,300 ) (f) 245,686
Restructuring costs 3,635 (3,635 ) (b) - 2,507 (2,507 ) (g) -
Impairment charges 6,626 (6,626 ) (c) - - - - Restatement,
investigations and remediation - -
- 3,261 (3,261 ) -
Total expenses 1,509,657 (14,809 ) 1,494,848 1,705,242
(8,068 ) 1,697,174 Operating income (loss) (12,760 ) 14,809
2,049 4,786 8,068 12,854 Other income (expense), net:
Interest income (expense), net (2,672 ) - (2,672 ) (3,263 ) -
(3,263 ) Foreign exchange gain (loss), net (249 ) 249 (d) - 118
(118 ) (d) - Other income (expense), net 541
(723 ) (e) (182 ) 198 -
198 Total other income (expense), net (2,380 ) (474 ) (2,854
) (2,947 ) (118 ) (3,065 )
Income (loss) from continuing operations before income taxes
(15,140 ) 14,335 (805 ) 1,839 7,950 9,789 Income tax provision
4,646 - 4,646
5,226 - 5,226 Income (loss) from
continuing operations $ (19,786 ) $ 14,335 $ (5,451 ) $
(3,387 ) $ 7,950 $ 4,563 * Basic income (loss)
from continuing operations $ (0.95 ) $ 0.69 $ (0.26 ) $ (0.16 ) $
0.38 $ 0.22 * Diluted income (loss) from continuing operations $
(0.95 ) $ 0.69 $ (0.26 ) $ (0.16 ) $ 0.38 $ 0.22 Basic
weighted average number of shares 20,816 20,816 20,816 20,863
20,863 20,863 Diluted weighted average number of shares 20,816
20,816 20,816 20,863 20,863 20,863
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 impairment of
capitalized internally developed software, impairment of net assets
in our publishing and printing business in Uruguay as well as
impairment of goodwill and net assets related to our staffing
business in Uruguay.
(d) Relates primarily to non-cash foreign exchange gain or loss on
our intercompany balances. (e) Relates primarily to the gain on
sale of non-core operations. (f)
Relates primarily to workers compensation
of $1.1 million, asset retirement obligation of $0.7 million and a
bonus paid to our former Chief Financial Officer for the filing of
our 2011 and 2012 Form 10-K of $0.5 million.
(g) Relates primarily to severance charges 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 November 1, 2015 November 2, 2014
GAAP income from continuing operations $ 71 $ 4,509 Special
items 914 2,016 Non-GAAP income from
continuing operations 985 6,525 Adjustments: Depreciation
and amortization 1,701 2,105 Share-based compensation expense 342
800 Other (income) loss, net (a) 923 885 Provision for income taxes
1,384 1,164 Adjusted EBITDA $ 5,335
$ 11,479
Twelve Months Ended
November 1, 2015 November 2, 2014 GAAP loss
from continuing operations $ (19,786 ) $ (3,387 ) Special items
14,335 7,950 Non-GAAP income (loss)
from continuing operations (5,451 ) 4,563 Adjustments:
Depreciation and amortization 6,811 9,323 Share-based compensation
expense (b) 1,400 1,198 Other (income) loss, net (a) 2,854 3,065
Provision for income taxes 4,646 5,226
Adjusted EBITDA $ 10,260 $ 23,375
(a)
Includes interest income (expense) and
other income (expense), net
(b)
Excludes stock-based compensation granted
to our new Board of Directors
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/20160113006253/en/
Investor Contacts:Volt Information Sciences, Inc.Paul
Tomkins212-704-7921voltinvest@volt.comorAddo CommunicationsLasse
Glassen424-238-6249lasseg@addocommunications.com
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