Volt Information Sciences, Inc. (OTC:VISI) today reported
financial results for its fiscal second quarter ended May 4, 2014.
The company reported a net loss in the second quarter of 2014 of
$3.5 million, or $0.17 per share, compared with a net loss of $17.5
million, or $0.84 per share in 2013. On a proforma basis the
company reported a net loss in the second quarter of 2014 of $5.3
million compared to a net loss of $14.1 million in 2013. Proforma
amounts include recognition of Unrecognized Revenue (defined
below).
“Our second quarter showed solid year-over-year improvements in
profitability across all of our segments. We are particularly
pleased with our staffing segment results as we grew operating
income by over 400% on a year-over-year basis, despite a 15%
decline in revenue. This improvement was driven by several targeted
actions taken in recent quarters including the divestiture of the
Procurestaff business, the reorganization of our traditional
staffing business and our continuing initiative to reduce exposure
to customers with unprofitable business terms. These actions not
only increase profitability, but also allow for greater flexibility
in responding to the business environment. Second quarter revenue
continued to be impacted by lower traditional staffing demand
levels from a number of our larger enterprise customers as compared
to last year, although most have shown a slight improvement in
demand compared to the first quarter,” said Ron Kochman, President
and Chief Executive Officer. “We also exited our telecommunication
government solutions business during the quarter as reduced federal
spending significantly minimized growth opportunity, efficiencies
and our ability to deliver profitability.”
Second Quarter Revenue and Operating Results
Net revenue in the second quarter of 2014 decreased $68.2
million to $451.5 million from $519.7 million in 2013, and proforma
net revenue decreased $73.4 million, or 14.0%, to $449.7 million
from $523.1 million in 2013. The change in revenue was the result
of decreased Staffing Services revenues of $70.0 million (proforma
of $71.2 million) resulting from fewer contingent workers on
assignment primarily at our largest enterprise customers where
current demand levels are lower than in the prior year, our exit of
certain customers as part of our continued focus on exiting or
reducing business levels with customers where profitability or
business terms are unfavorable, and with respect to GAAP results
$1.2 million lower net staffing Unrecognized Revenue. In addition,
Computer Systems revenues decreased $3.4 million from lower
directory assistance software services revenue resulting from
approximately 13% lower transaction volumes at slightly lower rates
and lower maintenance and system revenue, while sales of our
full-featured call center software (“On-Demand”) were flat. These
decreases were partially offset by higher information technology
infrastructure services revenue driven primarily by a $3.8 million
deferral of revenue in 2013.
Operating income in the second quarter of 2014 included
restatement, investigations and remediation costs of $0.6 million
and restructuring costs of $0.9 million ($0.3 million reflected in
corporate general and administrative) as we reduced headcount in
response to lower revenue levels and our staffing segment
reorganization. Without these items we would have had operating
income of $2.1 million and proforma operating income of $0.3
million.
Operating results for the second quarter of 2014 improved $17.5
million to operating income of $0.6 million from an operating loss
of $16.9 million in 2013, and proforma operating loss decreased
$12.4 million to a proforma loss of $1.2 million from $13.6 million
in 2013. The Staffing Services segment operating income in the
second quarter of 2014 improved $5.7 million ($4.5 million
proforma) primarily due to lower vendor management system
development costs resulting from our divestiture of Procurestaff in
the first quarter of 2014 and lower recruiting and indirect costs.
The Computer Services segment improved $0.8 million primarily from
lower delivery and administrative costs, and our Other segment
improved $4.2 million ($0.2 million proforma) primarily from
increased information technology infrastructure services at similar
margins.
Operating loss in the second quarter of 2013 of $16.9 million
included restatement, investigations and remediation costs of $7.4
million and restructuring costs of $0.9 million as we reduced
headcount in response to lower revenue levels. Without these items
we would have had an operating loss of $8.6 million and a proforma
operating loss of $5.3 million.
Condensed Consolidated Results of Operations by
SegmentUnaudited (in Thousands)
Results of Operations by Segment (Second Quarter 2014 vs.
Second Quarter 2013)
Three months ended May 4, 2014 Three months
ended April 28, 2013 Staffing
Computer
Staffing Computer
Total Services
Systems Other
Total Services
Systems Other
Revenue
Staffing service revenue
$ 406,733 $ 406,733 $ - $ - $ 476,729 $ 476,729 $ - $ - Other
revenue 44,752 -
15,405 29,347
42,995 -
18,752 24,243
Net revenue 451,485 406,733 15,405 29,347 519,724
476,729 18,752 24,243
Expenses
Direct cost of staffing services
revenue
345,899
345,899
- - 413,116 413,116 - - Cost of other revenue 38,656 - 14,590
24,066 39,873 - 16,742 23,131
Selling, administrative and other
operating costs
62,575
53,175 4,911 4,489 72,612 62,058 6,024 4,530
Amortization of purchased intangible
assets
240 25 214 1 346 12 215 119 Restructuring costs 598
577 (81 )
102 948
133 815
-
Segment operating income (loss)
3,517 7,057 (4,229 ) 689 (7,171 ) 1,410 (5,044 ) (3,537 )
Corporate general and administrative
2,279 2,380
Restatement, investigations and
remediation
593 7,387
Operating income (loss)
645 (16,938 )
Other income (expense), net
(1,762 ) 60
Income tax provision
2,378 583
Net loss $ (3,495 ) $ (17,461 )
NON-GAAP PROFORMA Three months ended May 4,
2014 Three months ended April 28, 2013
Staffing Computer Staffing Computer
Total Services
Systems Other
Total Services
Systems Other Net revenue $ 451,485 $
406,733 $ 15,405 $ 29,347 $ 519,724 $ 476,729 $ 18,752 $ 24,243
Recognition of previously unrecognized
revenue
(6,348 ) (6,190 ) - (158 ) (8,632 ) (8,632 ) - -
Additions to unrecognized revenue
4,549 4,537
- 12
11,969 8,164
- 3,805
Net non-GAAP proforma adjustment
(1,799 ) (1,653 )
- (146 ) 3,337
(468 ) -
3,805
Non-GAAP proforma net revenue
449,686 405,080
15,405 29,201
523,061 476,261
18,752
28,048
Expenses
Direct cost of staffing services
revenue
345,899 345,899 - - 413,116 413,116 - -
Cost of other revenue
38,656 - 14,590 24,066 39,873 - 16,742 23,131
Selling, administrative and other
operating costs
62,575 53,175 4,911 4,489 72,612 62,058 6,024 4,530
Amortization of purchased intangible
assets
240 25 214 1 346 12 215 119
Restructuring costs
598 577
(81 ) 102
948 133 815
-
Non-GAAP proforma segment operating
income (loss)
1,718 5,404 (4,229 ) 543 (3,834 ) 942 (5,044 ) 268
Non-GAAP proforma operating
loss
(1,154 ) (13,601 )
Non-GAAP proforma net loss
$ (5,294 ) $ (14,124 )
Unrecognized Revenue - Non-GAAP Proforma Measures
– Volt sometimes provides services despite a customer arrangement
not yet being finalized, or continues to provide services under an
expired arrangement while a renewal arrangement is being finalized.
Generally Accepted Accounting Principles (“GAAP”) usually requires
that services revenue be deferred until arrangements are finalized
or in some cases until cash is received, which causes some periods
to include the expense of providing services although the related
revenue is not recognized until a subsequent period (“Unrecognized
Revenue”). The discussion herein refers to financial data
determined both using GAAP as well as on a non-GAAP proforma basis.
The non-GAAP proforma basis includes adjustments for Unrecognized
Revenue so that revenue is shown in the same period as the related
services are provided. This non-GAAP financial information is used
by management and provided herein primarily to provide a more
complete understanding of the company’s business results and
trends. In addition, the company believes that lenders, analysts
and others in the investment community use this non-GAAP financial
information to assess the company’s historical results, and that
failure to report this non-GAAP measure could result in a
potentially misplaced perception that the company’s results have
either met, exceeded or underperformed expectations. This non-GAAP
information should not be considered an alternative for, or in
isolation from, the financial information prepared and presented in
accordance with GAAP. In addition, this measure may not be
comparable to similarly titled measures used by other
companies.
Year-to-date Revenue and Operating Results
Net revenue for the first six months of fiscal 2014 decreased
$151.3 million to $888.6 million from $1,039.9 million in 2013, and
proforma net revenue decreased $154.1 million, or 14.8%, to $887.9
million from $1,042.0 million in 2013. The change in revenue was
the result of decreased Staffing Services revenues of $152.1
million (proforma of $149.6 million) resulting from fewer
contingent workers on assignment primarily at our largest
enterprise customers where current demand levels are lower than in
the prior year, our exit of certain customers as part of our
continued focus on exiting or reducing business levels with
customers where profitability or business terms are unfavorable,
and with respect to GAAP results $2.5 million higher net staffing
Unrecognized Revenue. In addition, Computer Systems revenues
decreased $8.1 million from several large directory assistance
implementations reaching the end of the maintenance periods over
which the projects were being amortized, approximately 23% lower
transaction volumes, and lower pricing and maintenance levels.
These decreases were partially offset by higher information
technology infrastructure services revenue driven primarily by a
$5.0 million deferral of revenue in 2013, and by new customers and
to a lesser extent from net expanded business with existing
customers.
Operating results for the first six months of fiscal 2014
improved $19.3 million to a loss of $14.4 million from a loss of
$33.7 million in 2013, and proforma results improved $16.5 million
to a proforma loss of $15.2 million from a proforma loss of $31.7
million in 2013. The Staffing Services segment operating income
decreased $2.6 million (proforma $0.1 million) primarily due to a
multi-year indirect tax recovery in 2013, and lower direct margins
offset by a decrease in selling, administrative and other operating
costs as direct margin and proforma direct margin improved to 14.0%
and 13.9% from 13.2% and 13.0% in 2013, respectively. The Computer
Services segment improved $0.8 million primarily from lower
delivery and administrative costs, and the Other segment improved
$5.8 million ($0.5 million proforma) primarily from increased
information technology infrastructure services at similar margins.
Excluding the Staffing Services segment’s $3.0 million indirect tax
recovery in 2013, operating results in the first six months would
have increased $0.4 million and proforma operating results would
have increased $2.9 million.
Operating loss in the first six months of fiscal 2014 of $14.4
million included restatement, investigations and remediation costs
of $5.3 million, restructuring costs of $2.3 million ($0.3 million
included in corporate general and administrative) primarily in our
Staffing Services segment in connection with workforce reductions
and the sale of our vendor management system assets and the
continued decline in the directory assistance business within the
Computer Systems business, and $2.8 million lower Unrecognized
Revenue between 2014 and 2013. Without these items we would have
had an operating loss of $6.8 million and proforma operating loss
of $7.6 million.
Operating loss in the first six months of 2013 of $33.7 million
included restatement, investigations and remediation costs of $21.2
million, a $3.0 million indirect tax recovery related to multiple
years, and restructuring costs of $1.7 million. Without these items
we would have had an operating loss of $13.8 million and a proforma
operating loss of $11.8 million.
Condensed Consolidated Results of Operations by
SegmentUnaudited (in Thousands)
Results of Operations by Segment (First Six Months 2014 vs.
First Six Months 2013)
Six months ended May 4, 2014 Six
months ended April 28, 2013 Staffing
Computer
Staffing Computer
Total Services
Systems Other
Total Services
Systems Other Revenue Staffing
service revenue $ 799,002 $ 799,002 $ - $ - $ 951,091 $ 951,091 $ -
$ - Other revenue 89,631 -
30,925
58,706 88,838
- 38,978
49,860
Net revenue 888,633 799,002 30,925
58,706 1,039,929 951,091 38,978 49,860
Expenses
Direct cost of staffing services
revenue
687,359 687,359 - - 825,109 825,109 - -
Cost of other revenue
75,934 - 27,735 48,199 79,626 - 34,557 45,069
Selling, administrative and other
operating costs
126,725 107,441 10,188 9,096 140,659 120,001 11,553 9,105
Amortization of purchased intangible
assets
559 50 429 80 691 24 429 238
Restructuring costs
1,959 1,234
623 102
1,688 418
1,270 -
Segment operating income (loss)
(3,903 ) 2,918 (8,050 ) 1,229 (7,844 ) 5,539 (8,831 ) (4,552 )
Corporate general and administrative
5,237 4,670
Restatement, investigations and
remediation
5,261 21,207
Operating loss
(14,401 ) (33,721 ) Other income (expense), net (2,741 ) 329
Income tax provision
3,427 1,159
Net loss $ (20,569 ) $ (34,551 )
NON-GAAP PROFORMA Six months ended May 4, 2014
Six months ended April 28, 2013
Staffing Computer Staffing Computer
Total Services
Systems Other
Total Services
Systems Other Net revenue $ 888,633 $
799,002 $ 30,925 $ 58,706 $ 1,039,929 $ 951,091 $ 38,978 $ 49,860
Recognition of previously unrecognized
revenue
(5,300 ) (5,075 ) - (225 ) (11,115 ) (11,115 ) - -
Additions to unrecognized revenue
4,545 4,533
- 12
13,151 8,105
- 5,046
Net non-GAAP proforma adjustment
(755 ) (542 ) -
(213 ) 2,036
(3,010 ) -
5,046
Non-GAAP proforma net revenue
887,878 798,460
30,925 58,493
1,041,965 948,081
38,978
54,906
Expenses
Direct cost of staffing services
revenue
687,359 687,359 - - 825,109 825,109 - - Cost of other revenue
75,934 - 27,735 48,199 79,626 - 34,557 45,069
Selling, administrative and other
operating costs
126,725 107,441 10,188 9,096 140,659 120,001 11,553 9,105
Amortization of purchased intangible
assets
559 50 429 80 691 24 429 238
Restructuring costs
1,959 1,234
623 102
1,688 418
1,270 -
Non-GAAP proforma segment operating
income (loss)
(4,658 ) 2,376 (8,050 ) 1,016 (5,808 ) 2,529 (8,831 ) 494
Non-GAAP proforma operating
loss
(15,156 ) (31,685 )
Non-GAAP proforma net loss
$ (21,324 ) $ (32,515 )
Liquidity
During the second quarter 2014, the company disbursed $2.6
million in connection with the restatement, investigations and
remediation costs and provided cash from all other operating
activities of $1.1 million. The company used $1.1 million for
capital expenditures and received $0.3 million from the sale of
investments, net of purchases. Borrowing under the accounts
receivable securitization program and other short-term borrowings
increased by $2.7 million and the collateral for foreign currency
credit lines and banking facilities decreased by $3.0 million.
During the first six months of 2014, the company disbursed $4.2
million in connection with the restatement, investigations and
remediation costs and provided cash from all other operating
activities of $25.4 million. The company received $3.0 million from
the sale of software related assets, used $2.6 million for capital
expenditures and received $0.7 million from the sale of
investments, net of purchases. Borrowing under the accounts
receivable securitization program and other short-term borrowings
decreased by $19.6 million and the collateral for foreign currency
credit lines and banking facilities decreased by $3.0 million.
Condensed Consolidated Statements of Cash
FlowsUnaudited (in Thousands)
Three months ended Six months
ended
May 4,
2014
April 28,
2013
May 4,
2014
April 28,
2013
Cash and cash equivalents, beginning of
the period
$13,352 $25,504
$11,114 $26,483
Cash used in connection with restatement,
investigations and
remediation costs
(2,565 ) (8,279 ) (4,163 ) (23,462 ) Other changes in operating
assets and liabilities (1,754 ) 11,576 35,539 52,861 Cash provided
by (used in) all other operating activities 2,797
(15,472 ) (10,195 )
(29,788 )
Net cash provided by (used in) operating
activities (1,522 )
(12,175 ) 21,181
(389 ) Net cash provided by (used
in) investing activities (803 ) (1,726
) 1,086 (3,885 ) Net release of
cash restricted as collateral for borrowings 2,976 4,293 2,960
4,269 Net cash provided by (used in) all other financing activities
2,523 19,763
(19,993 ) 9,619
Net cash provided by
(used in) financing activities 5,499
24,056
(17,033 ) 13,888
Effect of exchange rate changes on cash and cash equivalents 26 251
204 (187 )
Net increase in cash and cash equivalents
3,200 10,406
5,438 9,427
Cash and cash equivalents, end of the period
$16,552 $35,910
$16,552
$35,910 Cash paid during the period:
Interest $932 $703 $1,885 $1,411 Income taxes $834 $665 $2,047
$8,918
On May 4, 2014, the company had cash and cash equivalents of
$16.6 million and an additional $28.8 million of cash restricted as
collateral for foreign currency credit lines and banking
facilities. The company also had approximately $18.2 million
available from its short-term financing program. Excluding $8.6
million of long-term debt, the company’s consolidated borrowings
were $147.5 million, which included $22.5 million of foreign
currency borrowings that are fully collateralized by restricted
cash used primarily to hedge net investments in foreign
subsidiaries, and $125.0 million drawn under the $200.0 million
short-term financing program.
Condensed Consolidated Balance SheetsUnaudited (in
Thousands, except share amounts)
May 4, 2014 November
3, 2013 ASSETS
CURRENT ASSETS: Cash and cash equivalents $16,552 $11,114
Restricted cash and short-term investments 47,735 53,500 Trade
accounts receivable, net of allowances of $1,426 and $1,811,
respectively 252,493 293,305 Recoverable income taxes 16,302 17,150
Prepaid insurance and other current assets 34,771
35,345
TOTAL CURRENT ASSETS
367,853 410,414 Prepaid insurance and other assets,
excluding current portion 45,955 52,574 Property, equipment and
software, net 30,711 37,324
TOTAL ASSETS $444,519
$500,312 LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES: Accrued compensation $47,114
$53,474 Accounts payable 53,063 57,165 Accrued taxes other than
income taxes 19,873 19,520 Accrued insurance and other 37,731
44,133 Deferred revenue, net, current portion 10,292 13,335
Short-term borrowings, including current portion of long-term debt
148,416 168,114
TOTAL CURRENT
LIABILITIES 316,489 355,741 Accrued insurance and
other, excluding current portion 16,507 14,705 Deferred revenue,
net, excluding current portion 2,698 2,839 Income taxes payable,
excluding current portion 8,998 8,659 Long-term debt, excluding
current portion 7,681 8,127
TOTAL LIABILITIES 352,373 390,071
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 - 23,550,102 and 23,536,769,
respectively; Outstanding - 20,862,795 and 20,849,462,
respectively
2,355
2,354
Paid-in capital 72,329 72,003 Retained earnings 62,701 83,007
Accumulated other comprehensive loss (3,359) (5,243) Treasury
stock, at cost; 2,687,307 shares (41,880)
(41,880)
TOTAL STOCKHOLDERS' EQUITY
92,146 110,241 TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
$444,519 $500,312
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), contact center computer systems, information
technology and telecommunications infrastructure services, and
telephone directory publishing and printing in Uruguay. Our
staffing services include a suite of workforce solutions that
include providing contingent personnel, personnel recruitment
services, and managed staffing services programs supporting
primarily professional administration, technical, information
technology and engineering positions. Our contact center computer
systems provide the functionality for telecommunications company
directory assistance services and for corporate and government call
centers, operator services, and database management. Our
information technology infrastructure services provide a
single-source alternative to original equipment manufacturer and
other independent IT service providers for server, storage, network
and desktop IT hardware maintenance, data center and network
monitoring and operations, and designing, deploying and supporting
corporate technology upgrade and refresh programs, as well as
design, engineering, construction, installation and maintenance of
voice, data, video and utility infrastructure. 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.
Volt Information Sciences, Inc.James Whitney,
212-704-7921voltinvest@volt.com
Grafico Azioni Volt Information Sciences (AMEX:VISI)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Volt Information Sciences (AMEX:VISI)
Storico
Da Lug 2023 a Lug 2024