Volt Information Sciences, Inc. (“Volt” or “the Company”)
(NYSE-MKT: VISI), a global provider of staffing services and
information technology infrastructure services, today reported
results for its second quarter ended May 1, 2016. Key elements
include:
- Second quarter net revenue of $335.4
million up 2.6% compared to the prior quarter and down 12.9%
year-over-year
- Second quarter loss from continuing
operations of $1.8 million or $2.5 million excluding special
items
- During the second quarter, the Company
completed a sale-leaseback transaction for its office facility in
Orange, California and sold its office facility in San Diego,
California with combined net proceeds totaling $29.1 million
- As of the end of the second quarter,
the Company had $58.8 million of available liquidity for working
capital requirements, up from $44.7 million at the end of the prior
quarter and $16.9 million a year ago
- The Company strengthened its top
leadership team with the addition of four experienced senior
executives and one internal promotion
Commenting on Volt’s second quarter performance, Michael Dean,
President and CEO, said, “Overall, the second quarter was a very
productive period for Volt. Importantly, we continued to make good
progress on our previously stated plan to streamline our
organization and improve our operational and financial performance.
Our cost structure is leaner and our actions to divest non-core
assets have improved our liquidity position over the past year. The
process to sell our last remaining non-core business, Maintech, is
proceeding. I am also pleased to report that we are adding to our
book of business with important new customer engagements. Finally,
we continue to augment our already strong management team with the
addition of several exceptional executives to head up key
leadership and revenue driving roles within the organization.”
Mr. Dean concluded, “Since embarking on our turnaround plan late
last year, I have maintained that it will take time to
operationally address all of the issues we are dealing with—and
even longer for the changes we are making to be reflected in our
financial results. However, I can say with confidence that we are
on-track to returning Volt to top and bottom line growth.”
Fiscal 2016 Second Quarter Results
Total revenue for the fiscal 2016 second quarter was $335.4
million, up $8.6 million, or 2.6% compared to total revenue of
$326.8 million in the first quarter of fiscal 2016. Compared to the
prior year period, total revenue decreased $49.8 million or 12.9%
compared to $385.2 million in the second quarter of fiscal
2015.
Staffing Services segment revenue was $317.2 million, an $8.5
million or 2.8% increase compared to $308.7 million in the first
quarter of fiscal 2016. Compared to the prior year period, Staffing
Services segment revenues declined $45.0 million, or 12.4% compared
to Staffing Services revenues of $362.3 million in the second
quarter of fiscal 2015. Other segment revenue was $18.2 million in
the second quarter of fiscal 2016, compared to $18.1 million in the
first quarter of fiscal 2016 and $22.9 million in the prior year
period.
Net loss of $1.8 million in the second quarter of fiscal 2016
included $2.0 million from gain on the sale of real estate, $0.8
million of restructuring and severance costs and $0.5 million in
other fees. Excluding the impact of these special items, net loss
for the second quarter of 2016 would have been $2.5 million on a
Non-GAAP basis.
Adjusted EBITDA, which is also a Non-GAAP measure, was $2.0
million in the fiscal 2016 second 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.
Senior Leadership Update
As previously announced, the Company has hired four pivotal
senior executives and promoted another, strengthening the Company’s
top leadership as it moves forward on its growth and profitability
strategies. Joining the company are Jorge Perez, President of
Volt’s North American Staffing Business – Volt Workforce Solutions
(VWS); Sue Tidswell, Senior Vice President Sales of VWS; Ann
Hollins, Chief Human Resources Officer; and Chuck Sperazza, Chief
Information Officer. In addition, Rhona Driggs has been promoted to
President of Volt Consulting Group (VCG), Volt’s MSP service
business, in addition to maintaining responsibility as Executive
Vice President, Commercial Operations for VWS.
Financing
As previously mentioned, during the second quarter Maintech
entered into a $10.0 million revolving credit agreement with Bank
of America. The Credit Agreement was added to provide flexibility
for working capital purposes. The Company expects to terminate the
Credit Agreement on or before the sale of Maintech.
Liquidity
As of May 1, 2016, the Company had $58.8 million of available
liquidity for working capital requirements as compared to $16.9
million in the prior year period.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal
2016 second quarter financial results will be held today at 4:30
p.m. Eastern Time / 1:30 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 877-407-9039
(201-689-8470 for international callers) and reference the "Volt
Information Sciences Earnings Conference Call."
Following the call, an audio replay will be available beginning
Wednesday, June 8, 2016 at 7:30 p.m. Eastern Time through
Wednesday, June 22, 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 # 13638068. 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.
Sequential Results of
Operations (in thousands, except per share data)
(Unaudited) Three Months Ended Six Months
Ended May 1, 2016 January 31, 2016 May 3,
2015 May 1, 2016 May 3, 2015
Revenue: Staffing services revenue $ 317,247 $ 308,681 $
362,277 $ 625,928 $ 723,098 Other revenue 18,192
18,149 22,912 36,341
45,157
Net revenue 335,439
326,830 385,189 662,269 768,255
Expenses: Direct cost of staffing services revenue 267,826
264,172 303,837 531,998 613,355 Cost of other revenue 15,887 16,788
19,909 32,675 39,514 Selling, administrative and other operating
costs 51,382 52,925 59,912 104,307 120,202 Restructuring and
severance costs 840 2,761 251 3,601 1,226 Impairment charges - -
5,374 - 5,374 Gain on sale of building (1,663 ) -
- (1,663 ) -
Total
expenses 334,272 336,646 389,283
670,918 779,671 Operating income (loss)
1,167 (9,816 ) (4,094 )
(8,649 ) (11,416 ) Interest
income (expense), net (862 ) (658 ) (730 ) (1,520 ) (1,364 )
Foreign exchange gain (loss), net (579 ) 344 (1,600 ) (235 ) (1,163
) Other income (expense), net (420 ) (279 ) 43
(699 ) 141
Loss from continuing
operations before income taxes (694 )
(10,409 ) (6,381 ) (11,103
) (13,802 ) Income tax provision 1,091
553 532 1,644
1,911
Loss from continuing operations
(1,785 ) (10,962 ) (6,913
) (12,747 ) (15,713 ) Loss from
discontinued operations - - -
- (4,519 )
Net loss $
(1,785 ) $ (10,962 ) $
(6,913 ) $ (12,747 ) $
(20,232 ) Per share data: Basic:
Loss from continuing operations $ (0.09 ) $ (0.53 ) $ (0.33 ) $
(0.61 ) $ (0.75 ) Loss from discontinued operations -
- - - (0.22 )
Net loss $ (0.09 ) $
(0.53 ) $ (0.33 ) $
(0.61 ) $ (0.97 ) Weighted
average number of shares 20,814 20,813 20,793 20,813 20,861
Diluted: Loss from continuing operations $ (0.09 ) $ (0.53 )
$ (0.33 ) $ (0.61 ) $ (0.75 ) Loss from discontinued operations
- - - -
(0.22 )
Net loss $ (0.09 )
$ (0.53 ) $ (0.33 )
$ (0.61 ) $ (0.97 )
Weighted average number of shares 20,814 20,813 20,793 20,813
20,861
Segment data: Revenue: Staffing
Services $ 317,247 $ 308,681 $ 362,277 $ 625,928 $ 723,098 Other
Segment 18,192 18,149 22,912
36,341 45,157
Net revenue
$ 335,439 $ 326,830
$ 385,189 $ 662,269
$ 768,255 Operating income
(loss): Staffing Services $ 7,934 $ 1,734 $ 10,337 $ 9,668 $
13,967 Other Segment 224 (371 ) (5,325 ) (147 ) (5,610 ) Corporate
general & administrative (8,654 ) (11,179 ) (9,106 ) (19,833 )
(19,773 ) Gain on sale of building 1,663 -
- 1,663 -
Operating income (loss) $ 1,167
$ (9,816 ) $ (4,094 )
$ (8,649 ) $ (11,416 )
Commencing in the first quarter of fiscal 2016, the Company
changed its methodology for the allocation of costs to more
effectively reflect and measure the individual businesses'
financial and operational efficiency. Prior period segment results
have been revised for these changes.
Condensed Consolidated Statements of Cash Flows
(in thousands) (Unaudited)
Six months ended May
1, 2016 May 3, 2015 Cash and cash equivalents,
beginning of the period $ 10,188 $
6,723 Cash used in all other operating activities
(10,230 ) (6,277 ) Changes in operating assets and liabilities
12,719 7,259
Net cash provided by
operating activities 2,489
982 Proceeds from sale of property and
equipment 36,878 227 Net cash used in all other investing
activities (9,325 ) (2,981 )
Net cash provided by
(used in) investing activities 27,553
(2,754 ) Decrease in cash restricted as
collateral for borrowings
-
10,352 Net change in borrowings (8,000 ) 1,494 Repayment of
long-term debt (7,295 ) (446 ) Purchases of common stock under
repurchase program - (4,262 ) Net cash provided by (used in) all
other financing activities (536 ) 206
Net
cash provided by (used in) financing activities
(15,831 ) 7,344 Effect
of exchange rate changes on cash and cash equivalents
(1,228 ) (1,958 ) Net cash
used in discontinued operations - (4,056 )
Net increase (decrease) in cash and cash
equivalents 12,983 (442
) Change in cash from discontinued operations
-
(211 ) Cash and cash
equivalents, end of the period $ 23,171
$ 6,070 Cash paid during the
period: Interest $ 1,662 $ 1,690 Income taxes $ 2,473 $ 634
Condensed Consolidated Balance
Sheets (in thousands, except share amounts) May 1,
2016 November 1, 2015 ASSETS (unaudited)
CURRENT ASSETS: Cash and cash equivalents $ 23,171 $ 10,188
Restricted cash and short-term investments 11,647 14,977 Trade
accounts receivable, net of allowances of $749 and $960,
respectively 177,178 198,385 Recoverable income taxes 17,762 17,583
Prepaid insurance and other current assets 17,724 15,865 Assets
held for sale 21,572 22,943
TOTAL
CURRENT ASSETS 269,054 279,941 Other assets,
excluding current portion 24,695 22,790 Property, equipment and
software, net 24,186 24,095
TOTAL
ASSETS $ 317,935 $ 326,826
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: Accrued compensation $ 28,601 $ 29,548
Accounts payable 31,312 39,164 Accrued taxes other than income
taxes 26,205 22,719 Accrued insurance and other 34,327 34,391
Short-term borrowings, including current
portion of long-term debt
92,000 982 Income taxes payable - 1,658 Liabilities held for sale
6,119 7,345
TOTAL CURRENT
LIABILITIES 218,564 135,807 Accrued insurance and
other, excluding current portion 13,606 13,699 Deferred gain on
sale of real estate, excluding current portion 27,080 - Income
taxes payable, excluding current portion 6,585 6,516 Long-term
debt, excluding current portion - 106,313
TOTAL LIABILITIES 265,835 262,335
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 23,738,003,
respectively; Outstanding - 20,832,503 and 20,801,080,
respectively
2,374 2,374 Paid-in capital 75,480 75,803 Retained earnings 24,569
38,034 Accumulated other comprehensive loss (7,692 ) (7,994 )
Treasury stock, at cost; 2,905,500 shares and 2,936,923 shares
(42,631 ) (43,726 )
TOTAL STOCKHOLDERS' EQUITY
52,100 64,491 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $ 317,935
$ 326,826
Unaudited Non-GAAP Statement of Operations and
Reconciliations (in thousands, except earnings per
share)
Three Months Ended May 1, 2016 Three Months Ended May 3,
2015 GAAP Special Items Ref
Non-GAAP GAAP Special Items Ref
Non-GAAP Revenue: Staffing services revenue $ 317,247
$ - $ 317,247 $ 362,277 $ - $ 362,277 Other revenue 18,192
- 18,192 22,912
- 22,912 Net revenue 335,439 - 335,439
385,189 - 385,189 Expenses: Direct cost of staffing services
revenue 267,826 - 267,826 303,837 - 303,837 Cost of other revenue
15,887 - 15,887 19,909 - 19,909 Selling, administrative and other
operating costs 51,382 (103 ) (a) 51,279 59,912 (1,632 ) (d) 58,280
Restructuring and severance costs 840 (840 ) (b) - 251 (251 ) -
Impairment charges - - - 5,374 (5,374 ) (e) - Gain on sale of
building (1,663 ) 1,663 (c) -
- - - Total expenses
334,272 720 334,992 389,283 (7,257 ) 382,026
Operating income (loss) 1,167 (720 ) 447
(4,094 ) 7,257 3,163 Other income (expense), net: Interest
income (expense), net (862 ) - (862 ) (730 ) - (730 ) Foreign
exchange gain (loss), net (579 ) - (579 ) (1,600 ) 1,600 (f) -
Other income (expense), net (420 ) -
(420 ) 43 - 43 Total
other income (expense), net (1,861 ) - (1,861 ) (2,287 ) 1,600 (687
) Income (loss) from
continuing operations before income taxes (694 ) (720 ) (1,414 )
(6,381 ) 8,857 2,476 Income tax provision 1,091
- 1,091 532 -
532 Income (loss) from continuing operations $
(1,785 ) $ (720 ) $ (2,505 ) $ (6,913 ) $ 8,857 $ 1,944
* Basic income (loss) from continuing operations $
(0.09 ) $ (0.03 ) $ (0.12 ) $ (0.33 ) $ 0.43 $ 0.09 * Diluted
income (loss) from continuing operations $ (0.09 ) $ (0.03 ) $
(0.12 ) $ (0.33 ) $ 0.43 $ 0.09 Basic weighted average
number of shares 20,814 20,814 20,814 20,793 20,793 20,793 Diluted
weighted average number of shares 20,814 20,814 20,814 20,793
20,793 20,793
Special item adjustments consist of the
following: (a) Relates primarily to fees incurred
to attract world class executive talent partially offset by the
amortization of the gain on the sale of the Orange, CA facility.
(b) Relates primarily to company-wide cost reduction plan
implemented in November 2015. (c) Relates to the gain on the sale
of the San Diego, CA facility (d) Relates primarily to costs
incurred responding to activist shareholders and related Board of
Director search fees, as well as legal and other items. (e) Relates
primarily to the impairment of net assets in our publishing and
printing business in Uruguay as well as the impairment of goodwill
related to our staffing business in Uruguay. (f) Relates primarily
to non-cash foreign exchange gain or loss on our intercompany
balances. * Earnings per share may not add in certain
periods due to rounding.
Unaudited Reconciliation of GAAP Loss from Continuing
Operations to Adjusted EBITDA (in thousands)
Three
Months Ended May 1, 2016 May 3, 2015 GAAP
loss from continuing operations $ (1,785 ) $ (6,913 ) Special items
(720 ) 8,857 Non-GAAP income (loss) from
continuing operations (2,505 ) 1,944 Adjustments:
Depreciation and amortization 1,519 1,639 Share-based compensation
expense 78 242 Other (income) loss, net (a) 1,861 687 Provision for
income taxes 1,091 532 Adjusted EBITDA
$ 2,044 $ 5,044 (a) 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/20160608006424/en/
Volt Information Sciences, Inc.Paul
Tomkins212-704-7921voltinvest@volt.comorAddo CommunicationsLasse
Glassen424-238-6249lasseg@addocommunications.com
Volt Information Sciences (AMEX:VISI)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Volt Information Sciences (AMEX:VISI)
Historical Stock Chart
Von Jul 2023 bis Jul 2024