Volt Information Sciences, Inc. (“Volt” or “the Company”)
(NYSE-MKT: VISI), an international provider of staffing
services and technology outsourcing services, today reported
results for its fiscal 2017 second quarter ended April 30, 2017.
Key highlights include:
- Net revenue of $303.0 million, down
9.7% or $32.6 million year-over-year; on a same store basis,
excluding net revenue contributed from businesses sold or exited
during the past year and the effect of currency fluctuations, net
revenue declined 5.6% year-over-year
- Second quarter gross margin percentage
of 15.6% increased 30 basis points year-over-year
- Net loss of $0.9 million down from a
net loss of $1.8 million in the prior year
- Completed the sale of Maintech, Inc., a
non-core business, for a purchase price of $18.3 million
- Received IRS federal income tax refund
of $13.8 million
- Deployed new information technology
systems enterprise-wide in North America to improve time to market
and enhance competitiveness in sales delivery to support future
growth
Commenting on Volt’s second quarter performance, Michael Dean,
President and CEO, said, “Volt had a productive second quarter,
with progress in several key aspects of our business. I am pleased
with our ongoing efforts to strengthen our balance sheet as
evidenced by further reductions in total debt and improvements in
our liquidity position. During the quarter, we completed the
previously announced sale of our last remaining non-core business,
Maintech, and also received payment from the IRS on our
long-standing tax refund. We also continue to benefit from our
ongoing focus on higher margin business with second quarter gross
margins expanding on both a sequential quarter and year-over-year
basis. In addition, we expect to improve our competitive position
and operational efficiencies with new information technology that
we successfully deployed in the quarter.”
Mr. Dean continued, “While the completion of large projects with
several customers impacted second quarter revenue growth, we added
to our book of business with important new client relationships
established in the quarter, and grew our pipeline of new
opportunities as we look ahead to the second half of fiscal 2017.
Based on our steady progress, I remain highly confident in our
ability to return Volt to sustained profitable growth.”
Fiscal 2017 Second Quarter Results
Total revenue for the fiscal 2017 second quarter was $303.0
million, down $32.6 million, or 9.7%, compared to $335.6 million in
the second quarter of fiscal 2016. On a same store basis, excluding
net revenue contributed from businesses sold or exited during the
past year and the effect of currency fluctuations, net revenue
declined 5.6% year-over-year.
North American Staffing revenue, which provides a broad spectrum
of contingent staffing, direct placement, recruitment process
outsourcing and other employment services, was $233.8 million, a
$17.1 million, or 6.8% decrease compared to North American Staffing
revenue of $250.9 million in the second quarter of fiscal 2016.
International Staffing revenue, which includes the Company’s
contingent staffing, direct placement and managed service programs
businesses in Europe and Asia, was $30.2 million, a $3.0 million,
or 9.1% decrease compared to $33.2 million from the second quarter
of fiscal 2016, primarily as a result of foreign exchange rate
fluctuations of $3.3 million. On a constant currency basis,
International Staffing revenue increased $0.3 million, or 0.9%,
year-over-year.
Technology Outsourcing Services and Solutions revenue, which
provides quality assurance, business intelligence and analytics and
customer service support for companies in a variety of industries,
was $24.5 million, down $0.5 million, or 1.9%, compared to $25.0
million in the prior year period.
Corporate and Other revenue, which primarily consists of the
Company’s North American managed service business was $16.0
million, down $13.6 million, or 45.8%, compared to $29.6 million in
the second quarter of fiscal 2016. On a same store basis, excluding
businesses sold or exited of $11.8 million, Corporate and Other
revenue decreased $1.8 million, or 15.4%, year-over-year.
Net loss of $0.9 million in the second quarter of fiscal 2017
improved by $0.9 million, or 52.2%, from the second quarter of
fiscal 2016. Net loss in the second quarter of fiscal 2017 included
a $3.9 million gain from the sale of Maintech. Excluding the impact
of the sale of Maintech and other special items of $1.3 million,
net loss for the second quarter of 2017 would have been $6.1
million.
Adjusted EBITDA, which is a Non-GAAP measure, was a loss of $1.9
million in the fiscal 2017 second quarter, down from a gain of $2.0
million (Non-GAAP) in the year ago period. Adjusted EBITDA excludes
the impact of special items, interest expense, income taxes,
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.
Liquidity
As of April 30, 2017, the Company had $55.9 million of global
liquidity for working capital requirements as compared to $44.0
million in the prior quarter.
Corporate Developments
- Sale of Maintech, Inc.—During
the second quarter, the Company completed the sale of Maintech,
Inc., its information technology infrastructure business for a
purchase price of $18.3 million. Under the terms of the agreement,
the Company received net proceeds of approximately $13.1 million in
cash and recognized a gain on disposal of $3.9 million.
- Tax Refunds—During the second
quarter, the IRS approved the federal portion of the Company’s IRS
refund from the filing of the Company’s amended tax returns for
fiscal years 2004 through 2010. This resulted in a refund of $13.8
million and the remaining receivable of approximately $3 million
relates to refunds which are now being applied for and finalized as
a result of the IRS audit conclusion and are expected to be
received over the next several quarters.
- Board of Directors—During the
second quarter, the Company announced that William J. Grubbs,
President and CEO of Cross Country Healthcare, and Arnold Ursaner,
founder of independent securities research firm CJS Securities,
have been nominated to stand for election to the Company’s Board of
Directors at the 2017 Annual Meeting of Shareholders. Volt also
announced that current Director, John Rudolf, retired from the
board effective February 23, 2017, and William J. Grubbs has been
appointed to fill the vacancy. In addition, current Director James
Boone will be stepping down in June.
Subsequent Events
- Effective immediately, Jorge Perez has
resigned as President of Volt Workforce Solutions. The Company has
commenced a search for his permanent replacement. Michael Dean,
President and CEO, will be assuming this role on an interim
basis.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal
2017 second quarter financial results will be held today at 11:00
a.m. Eastern Time / 8:00 a.m. Pacific Time. Volt’s President and
CEO Michael Dean and CFO Paul Tomkins will host the conference
call. Participants may 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
Friday, June 9, 2017 at 2:00 p.m. Eastern Time through Friday, June
23, 2017 at 11:59 p.m. Eastern Time. To access the replay, dial
844-512-2921 (412-317-6671 for international callers) and enter the
Conference ID # 13662328. 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 and technology outsourcing
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 managed
service programs consist of managing the procurement and
on-boarding of contingent workers from multiple providers. Our
technology outsourcing services assist with individual customer
assignments, as well as customer care call centers and gaming
industry quality assurance testing services. 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. 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)
(Unaudited)
Three Months Ended Six Months
Ended April 30, 2017 January 29, 2017
May 1, 2016 April 30, 2017 May 1,
2016 Net revenue $ 303,005 $ 313,024 $ 335,576 $
616,029 $ 662,544 Cost of services 255,886
266,134 284,104 522,020
565,504
Gross margin 47,119 46,890
51,472 94,009 97,040 Expenses:
Selling, administrative and other operating costs 51,171 48,890
51,128 100,061 103,751 Restructuring and severance costs 199 624
840 823 3,601 Impairment charge 290 - - 290 - Gain from
divestitures (3,938 ) - (1,663 )
(3,938 ) (1,663 )
Total expenses 47,722
49,514 50,305 97,236 105,689
Operating income (loss) (603 ) (2,624
) 1,167 (3,227 ) (8,649 )
Interest income (expense), net (891 ) (858 ) (862 ) (1,749 )
(1,520 ) Foreign exchange gain (loss), net 184 127 (579 ) 311 (235
) Other income (expense), net (311 ) (599 )
(420 ) (910 ) (699 )
Loss before income taxes
(1,621 ) (3,954 ) (694 )
(5,575 ) (11,103 ) Income tax provision
(benefit) (767 ) 623 1,091
(144 ) 1,644
Net loss $
(854 ) $ (4,577 ) $
(1,785 ) $ (5,431 ) $
(12,747 ) Per share data: Basic:
Net loss $ (0.04 ) $ (0.22 ) $ (0.09 ) $ (0.26 ) $ (0.61 ) Weighted
average number of shares 20,921 20,918 20,814 20,919 20,813
Diluted: Net loss $ (0.04 ) $ (0.22 ) $ (0.09 ) $ (0.26 ) $
(0.61 ) Weighted average number of shares 20,921 20,918 20,814
20,919 20,813
Segment data: Net
revenue: North American Staffing $ 233,804 $ 231,865 $ 250,881
$ 465,669 $ 489,456 International Staffing 30,231 30,350 33,250
60,581 67,201 Technology Outsourcing Services and Solutions 24,499
25,671 24,981 50,170 52,195 Corporate and Other 16,033 26,296
29,590 42,329 59,995 Eliminations (1,562 ) (1,158 )
(3,126 ) (2,720 ) (6,303 )
Net revenue
$ 303,005 $ 313,024
$ 335,576 $ 616,029
$ 662,544 Operating income
(loss): North American Staffing $ 3,058 $ 2,828 $ 6,031 $ 5,886
$ 5,870 International Staffing 531 642 749 1,173 705 Technology
Outsourcing Services and Solutions 1,075 1,586 1,306 2,661 3,303
Corporate and Other (9,205 ) (7,680 ) (8,582 ) (16,885 ) (20,190 )
Gain from divestitures 3,938 -
1,663 3,938 1,663
Operating
income (loss) $ (603 ) $
(2,624 ) $ 1,167 $
(3,227 ) $ (8,649 )
Work days 65 59 65 124
124
Effective in the first quarter of fiscal 2017, in an effort to
simplify and refine our internal reporting, the Company modified
its intersegment sales structure between North American Staffing
and Technology Outsourcing Services and Solutions segments.
Accordingly, all prior periods have been recast to reflect the
current segment presentation.
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(Unaudited)
Six Months Ended April 30, 2017
May 1, 2016 Cash and cash equivalents, beginning
of the period $ 6,386 $ 10,188
Cash used in all other operating activities (6,074 ) (10,153
) Changes in operating assets and liabilities 17,873
12,642
Net cash provided by operating
activities 11,799 2,489
Proceeds from divestitures 15,224 36,648 Net cash
used in all other investing activities (5,793 )
(9,095 )
Net cash provided by investing activities
9,431 27,553 Repayment of
long-term debt - (7,295 ) Net cash used in all other financing
activities (7,783 ) (8,536 )
Net cash used in
financing activities (7,783 )
(15,831 ) Effect of exchange rate changes
on cash and cash equivalents 910 (1,228 )
Net increase in cash and cash equivalents
14,357 12,983 Cash and
cash equivalents, end of the period $ 20,743
$ 23,171 Cash paid during the
period: Interest $ 1,838 $ 1,662 Income taxes $ 1,111 $ 2,473
Condensed Consolidated Balance
Sheets
(in thousands, except share
amounts)
April 30, 2017 October 30, 2016
ASSETS (unaudited)
CURRENT ASSETS: Cash and cash
equivalents $ 20,743 $ 6,386 Restricted cash and short-term
investments 17,481 13,948 Trade accounts receivable, net of
allowances of $527 and $801, respectively 190,688 193,866
Recoverable income taxes 3,281 16,979 Other current assets 11,522
11,806 Assets held for sale 694 17,580
TOTAL CURRENT ASSETS 244,409 260,565 Other
assets, excluding current portion 25,534 25,767 Property, equipment
and software, net 32,899 30,133
TOTAL ASSETS $ 302,842 $
316,465 LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES: Accrued compensation $
26,393 $ 29,147 Accounts payable 39,303 32,425 Accrued taxes other
than income taxes 25,408 22,791 Accrued insurance and other 32,639
34,306 Short-term borrowings 90,000 2,050 Liabilities held for sale
332 5,760
TOTAL CURRENT
LIABILITIES 214,075 126,479 Accrued insurance and
other 12,270 13,136 Deferred gain on sale of real estate 25,135
26,108 Income taxes payable 5,496 6,777 Long-term debt -
95,000
TOTAL LIABILITIES 256,976
267,500 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
shares; Outstanding - 20,927,521 and 20,917,500 shares,
respectively 2,374 2,374 Paid-in capital 77,732 76,564 Retained
earnings 15,345 21,000 Accumulated other comprehensive loss (9,515
) (10,612 ) Treasury stock, at cost; 2,810,482 and 2,820,503
shares, respectively (40,070 ) (40,361 )
TOTAL
STOCKHOLDERS' EQUITY 45,866
48,965 TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 302,842 $ 316,465
GAAP to Non-GAAP
Reconciliations
(in thousands)
Three Months Ended April 30,
2017 May 1, 2016 Reconciliation of GAAP
net loss to Non-GAAP net loss: GAAP net loss $ (854 ) $ (1,785
) Selling, administrative and other operating costs (486 ) (a) 103
(f) Restructuring and severance costs 199 (b) 840 (b) Impairment
charge 290 (c) - Gain from divestitures (3,938 ) (d) (1,663 ) (g)
Income tax benefit (1,283 ) (e) - Non-GAAP net
loss $ (6,072 ) $ (2,505 )
Three Months Ended
April 30, 2017 May 1, 2016 Reconciliation of GAAP
net loss to Adjusted EBITDA: GAAP net loss $ (854 ) $ (1,785 )
Selling, administrative and other operating costs (486 ) (a) 103
(f) Restructuring and severance costs 199 (b) 840 (b) Impairment
charge 290 (c) - Gain from divestitures (3,938 ) (d) (1,663 ) (g)
Depreciation and amortization 2,001 1,519 Share-based compensation
expense 627 78 Other (income) expense, net 1,018 1,861 Provision
(benefit) for income taxes (767 ) 1,091
Adjusted EBITDA $ (1,910 ) $ 2,044
Special
item adjustments consist of the following: (a)
Relates to the amortization of the gain on the sale of the Orange,
CA facility. (b) Relates primarily to Company-wide cost reduction
plan implemented in the first quarter of fiscal 2016. (c) Relates
to previously purchased software module that is no longer in use.
(d) Relates to the sale of Maintech, a non-core business.
(e)
Relates to a discrete tax benefit
resulting from the resolution of uncertain tax positions upon the
completion and effective settlement of the IRS audit of the
Company's fiscal 2004 through 2010 federal tax and associated state
tax audits.
(f)
Relates primarily to consultants and
professional fees incurred to attract executive talent partially
offset by the amortization of the gain on the sale of the Orange,
CA facility.
(g) Relates to the gain on the sale of the San Diego, CA facility.
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain Non-GAAP financial information,
which includes adjustments for special items and certain line items
on a constant currency basis, as additional information for its
segment revenue, consolidated net income (loss), 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 Non-GAAP measures
on a constant currency basis and eliminating special items provides
useful information to management and investors regarding certain
financial and business trends relating to its financial condition
and results of operations because they permit evaluation of the
results of the Company without the effect of currency fluctuations
or special items that management believes make it more difficult to
understand and evaluate the Company’s results of operations.
Special items include impairments, restructuring and severance as
well as certain income or expenses not indicative of the Company’s
current or future period performance and are more fully disclosed
in the tables.
Adjusted EBITDA is defined as earnings or loss before interest,
income taxes, depreciation and amortization (“EBITDA”) adjusted to
exclude share-based compensation expense as well as the special
items described above.
Adjusted EBITDA is a performance measure rather than a cash flow
measure. The Company believes the presentation of Adjusted EBITDA
is relevant and useful for investors because it allows investors to
view results in a manner similar to the method used by
management.
Adjusted EBITDA has limitations as an analytical tool and should
not be considered in isolation from, or as a substitute for,
analysis of the Company’s results of operations and operating cash
flows as reported under GAAP. For example, Adjusted EBITDA: does
not reflect capital expenditures or contractual commitments; does
not reflect changes in, or cash requirements for, the Company’s
working capital needs; does not reflect the interest expense, or
the cash requirements necessary to service the interest payments,
on the Company’s debt; and does not reflect cash required to pay
income taxes.
The Company’s computation of Adjusted EBITDA may not be
comparable to other similarly titled measures computed by other
companies because all companies do not calculate these measures in
the same fashion.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170609005345/en/
Investor Contacts:Volt Information Sciences,
Inc.voltinvest@volt.comorAddo Investor RelationsLasse Glassen,
424-238-6249lglassen@addoir.com
Grafico Azioni Volt Information Sciences (AMEX:VISI)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni Volt Information Sciences (AMEX:VISI)
Storico
Da Ott 2023 a Ott 2024