VISI Volt Information Sciences Inc

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.

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Investor Contacts:Volt Information Sciences, Inc.Paul Tomkins212-704-7921voltinvest@volt.comorAddo CommunicationsLasse Glassen424-238-6249lasseg@addocommunications.com