Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 29, 2017 | Mar. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 29, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | VISI | |
Entity Registrant Name | VOLT INFORMATION SCIENCES, INC. | |
Entity Central Index Key | 103,872 | |
Current Fiscal Year End Date | --10-29 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,917,800 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
REVENUE: | ||
NET REVENUE | $ 313,024 | $ 326,968 |
Cost of services | 266,134 | 281,400 |
GROSS MARGIN | 46,890 | 45,568 |
EXPENSES | ||
Selling, administrative and other operating costs | 48,890 | 52,623 |
Restructuring and severance costs | 624 | 2,761 |
TOTAL EXPENSES | 49,514 | 55,384 |
OPERATING LOSS | (2,624) | (9,816) |
OTHER INCOME (EXPENSE), NET | ||
Interest income (expense), net | (858) | (658) |
Foreign exchange gain (loss), net | 127 | 344 |
Other income (expense), net | (599) | (279) |
TOTAL OTHER INCOME (EXPENSE), NET | (1,330) | (593) |
LOSS BEFORE INCOME TAXES | (3,954) | (10,409) |
Income tax provision | 623 | 553 |
NET LOSS | $ (4,577) | $ (10,962) |
Basic: | ||
Net loss per share (usd per share) | $ (0.22) | $ (0.53) |
Weighted average number of shares - basic (shares) | 20,918 | 20,813 |
Diluted: | ||
Net loss per share (usd per share) | $ (0.22) | $ (0.53) |
Weighted average number of shares - diluted (shares) | 20,918 | 20,813 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
NET LOSS | $ (4,577) | $ (10,962) |
Other comprehensive loss: | ||
Foreign currency translation adjustments net of taxes of $0 and $0, respectively | 527 | (2,515) |
COMPREHENSIVE LOSS | $ (4,050) | $ (13,477) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, taxes | $ 0 | $ 0 |
Unrealized gains (loss) on marketable securities, taxes | $ 0 | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 29, 2017 | Oct. 30, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 19,018 | $ 6,386 |
Restricted cash and short-term investments | 12,140 | 13,948 |
Trade accounts receivable, net of allowances of $762 and $801, respectively | 172,164 | 193,866 |
Recoverable income taxes | 16,943 | 16,979 |
Other current assets | 12,458 | 11,806 |
Assets held for sale | 19,075 | 17,580 |
TOTAL CURRENT ASSETS | 251,798 | 260,565 |
Other assets, excluding current portion | 25,118 | 25,767 |
Property, equipment and software, net | 33,063 | 30,133 |
TOTAL ASSETS | 309,979 | 316,465 |
CURRENT LIABILITIES: | ||
Accrued compensation | 28,219 | 29,147 |
Accounts payable | 28,639 | 32,425 |
Accrued taxes other than income taxes | 24,752 | 22,791 |
Accrued insurance and other | 33,224 | 34,306 |
Short-term borrowings | 97,050 | 2,050 |
Income taxes payable | 324 | 0 |
Liabilities held for sale | 5,975 | 5,760 |
TOTAL CURRENT LIABILITIES | 218,183 | 126,479 |
Accrued insurance and other, excluding current portion | 10,726 | 9,999 |
Deferred gain on sale of real estate, excluding current portion | 25,622 | 26,108 |
Income taxes payable, excluding current portion | 6,780 | 6,777 |
Deferred income taxes | 3,137 | 3,137 |
Long-term debt | 0 | 95,000 |
TOTAL LIABILITIES | 264,448 | 267,500 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock, par value $1.00; Authorized - 500,000 shares; Issued - none | 0 | 0 |
Common stock, par value $0.10; Authorized - 120,000,000 shares; Issued - 23,738,003 shares; Outstanding - 20,917,500 shares | 2,374 | 2,374 |
Paid-in capital | 77,180 | 76,564 |
Retained earnings | 16,423 | 21,000 |
Accumulated other comprehensive loss | (10,085) | (10,612) |
Treasury stock, at cost; 2,820,503 shares | (40,361) | (40,361) |
TOTAL STOCKHOLDERS' EQUITY | 45,531 | 48,965 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 309,979 | $ 316,465 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 29, 2017 | Oct. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 762 | $ 801 |
Preferred stock, par value (usd per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (usd per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 23,738,003 | 23,738,003 |
Common stock, shares outstanding | 20,917,500 | 20,917,500 |
Treasury stock, shares | 2,820,503 | 2,820,503 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
NET LOSS | $ (4,577) | $ (10,962) |
Adjustment to reconcile net loss to cash provided by operating activities: | ||
Depreciation and amortization | 1,379 | 1,538 |
Provision (release) of doubtful accounts and sales allowances | 54 | (174) |
Unrealized foreign currency exchange gain | (138) | (428) |
Amortization of gain on sale leaseback of property | 486 | 0 |
Loss on dispositions of property, equipment and software | 0 | 138 |
Share-based compensation expense | 615 | 187 |
Change in operating assets and liabilities: | ||
Trade accounts receivable | 21,616 | 28,463 |
Restricted cash | 1,673 | (2,577) |
Other assets | 770 | (1,087) |
Net assets held for sale | (1,249) | 615 |
Accounts payable | (3,768) | (4,136) |
Accrued expenses and other liabilities | 621 | 2,802 |
Income taxes | 363 | (1,776) |
Net cash provided by operating activities | 16,873 | 12,603 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sales of investments | 361 | 581 |
Purchases of investments | (153) | (237) |
Proceeds from sale of property, equipment, and software | 79 | 363 |
Purchases of property, equipment, and software | (4,373) | (3,887) |
Net cash used in investing activities | (4,086) | (3,180) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of borrowings | (5,000) | 0 |
Draw-down on borrowings | 5,000 | 0 |
Repayment of long-term debt | 0 | (318) |
Debt issuance costs | (626) | (358) |
Proceeds from exercise of options | 0 | 9 |
Withholding tax payment on vesting of restricted stock awards | 0 | (116) |
Net cash used in financing activities | (626) | (783) |
Effect of exchange rate changes on cash and cash equivalents | 471 | (2,313) |
Net increase in cash and cash equivalents | 12,632 | 6,327 |
Cash and cash equivalents, beginning of period | 6,386 | 10,188 |
Cash and cash equivalents, end of period | 19,018 | 16,515 |
Cash paid during the period: | ||
Interest | 869 | 782 |
Income taxes | $ 327 | $ 2,112 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jan. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The accompanying interim condensed consolidated financial statements of Volt Information Sciences, Inc. (“Volt” or the “Company”) have been prepared in conformity with generally accepted accounting principles, consistent in all material respects with those applied in the Annual Report on Form 10-K for the year ended October 30, 2016. The Company makes estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates and changes in estimates are reflected in the period in which they become known. Accounting for certain expenses, including income taxes, are based on full year assumptions, and the financial statements reflect all normal adjustments that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The interim information is unaudited and is prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), which provides for omission of certain information and footnote disclosures. This interim financial information should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended October 30, 2016. Certain reclassifications have been made to the prior year financial statements in order to conform to the current year's presentation. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Jan. 29, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements New Accounting Standards Not Yet Adopted by the Company In February 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and application of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The amendments are effective at the same time as the new revenue standard. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company expects to adopt this ASU in the first quarter of fiscal 2019 and is currently assessing if there is any impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350) . This ASU simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The amendments in this update should be applied on a prospective basis and adopted for an entity’s annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company expects to adopt this ASU in the first quarter of fiscal 2022 and does not anticipate a significant impact upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force . The amendments provide guidance on eight specific cash flow classification issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, corporate and bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company expects to adopt this ASU in the first quarter of fiscal 2019 and does not anticipate a significant impact upon adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. For public business entities that are SEC filers, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects to adopt this ASU in the first quarter of fiscal 2020 and is in the process of assessing the impact that the adoption of this ASU will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company expects to adopt this ASU in the first quarter of fiscal 2018 and does not anticipate a significant impact upon adoption. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. ASU 2016-02 is effective for us in our first quarter of fiscal 2020 on a modified retrospective basis. We have preliminarily evaluated the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements, and we currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of ASU 2016-02, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). This ASU is effective for the annual period ending after December 15, 2016, with early adoption permitted. The Company expects to adopt this ASU in the fourth quarter of fiscal 2017 and is in the process of assessing the impact that the adoption of this ASU will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This standard is effective for fiscal years and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. Topic 606 is effective for the Company in the first quarter of fiscal 2019. After our preliminary assessment, we do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems. As we continue to evaluate the impacts of our pending adoption of Topic 606 in fiscal 2017, our preliminary assessments are subject to change. From March through December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. These amendments are intended to improve and clarify the implementation guidance of Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of ASU No. 2014-09 and ASU No. 2015-14. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. Recently Adopted Accounting Standards In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract and expense the cost as the services are received. This ASU was adopted by the Company in the first quarter of fiscal 2017 on a prospective basis. The Company does not currently have any projects that meet the criteria to be in scope of the internal-use software guidance and it did not have any impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The ASU requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC Staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These ASUs were adopted by the Company in the first quarter of fiscal 2017. The Company has continued to defer and present debt issuance costs as an asset and to amortize the deferred issuance costs ratably over the term of the line-of-credit arrangement resulting in no impact on our consolidated financial statements. All other ASUs that became effective for Volt in the first quarter of fiscal 2017 were not applicable to the Company at this time and therefore did not have any impact during the period. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Jan. 29, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On December 1, 2014, the Company completed the sale of its Computer Systems segment to NewNet Communication Technologies, LLC (“NewNet”), a Skyview Capital, LLC, portfolio company. The proceeds of the transaction were a $10.0 million note bearing interest at one half percent ( 0.5 percent) per year due in four years and convertible into a capital interest of up to 20% in NewNet. The Company may convert the note at any time and is entitled to receive early repayment in the event of certain events such as a change in control of NewNet. The note was valued at $8.4 million which approximated its fair value. At January 29, 2017, the note is carried at net realizable value and the unamortized discount was $1.1 million . The Company and NewNet are in discussions regarding the final working capital adjustment amount based on the comparison of the actual transaction date working capital amount to an expected working capital amount, along with certain minor indemnity claims. The Company does not believe the resolution will have a material impact on its financial statements or net income. The Company may consider monetizing the note prior to maturity in either a secondary market or an early extinguishment, if NewNet agrees, at some value less than the face amount and may offset a settlement on the working capital adjustment and indemnity claims against the note. Accordingly, the Company has ceased accreting interest on the note until the dispute is resolved. The Company believes that any settlement of the note would not be materially different than its current carrying value. |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale | 3 Months Ended |
Jan. 29, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | Assets and Liabilities Held for Sale In October 2015, the Company's Board of Directors approved a plan to sell the Company’s information technology infrastructure services business (“Maintech”). Maintech met all of the criteria to classify its assets and liabilities as held for sale in the fourth quarter of fiscal 2015. The potential disposal of Maintech did not represent a strategic shift that will have a major effect on the Company’s operations and financial results and is, therefore, not classified as discontinued operations in accordance with ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360) . As part of the required evaluation under the held for sale guidance, the Company determined that the approximate fair value less costs to sell the operations exceeded the carrying value of the net assets and no impairment charge was recorded. The Company completed the sale of Maintech in March 2017. The following table reconciles the major classes of assets and liabilities classified as held for sale as part of continuing operations in the Condensed Consolidated Balance Sheets (in thousands): January 29, 2017 October 30, 2016 Assets included as part of continuing operations Trade accounts receivable, net $ 15,087 $ 13,553 Recoverable income taxes 106 15 Other assets 3,264 3,339 Property, equipment and software, net 123 178 Purchased intangible assets 495 495 Total major classes of assets as part of continuing operations $ 19,075 $ 17,580 Liabilities included as part of continuing operations Accrued compensation $ 2,442 $ 2,432 Accounts payable 865 921 Accrued taxes other than income taxes 954 833 Accrued insurance and other 1,714 1,574 Total major classes of liabilities as part of continuing operations $ 5,975 $ 5,760 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Jan. 29, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss for the three months ended January 29, 2017 were (in thousands): Foreign Currency Translation Accumulated other comprehensive loss at October 30, 2016 $ (10,612 ) Other comprehensive loss 527 Accumulated other comprehensive loss at January 29, 2017 $ (10,085 ) There were no reclassifications from accumulated other comprehensive loss for the three months ended January 29, 2017. |
Restricted Cash and Short-Term
Restricted Cash and Short-Term Investments | 3 Months Ended |
Jan. 29, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash and Short-Term Investments | Restricted Cash and Short-Term Investments Restricted cash primarily includes amounts related to requirements under certain contracts with managed service program customers for whom the Company manages the customers’ contingent staffing requirements, including processing of associate vendor billings into single, combined customer billings and distribution of payments to associate vendors on behalf of customers, as well as minimum cash deposits required to be maintained as collateral. Distribution of payments to associate vendors are generally made shortly after receipt of payment from customers, with undistributed amounts included in restricted cash and accounts payable between receipt and distribution of these amounts. Changes in restricted cash collateral are classified as an operating activity, as this cash is directly related to the operations of this business. At January 29, 2017 and October 30, 2016, restricted cash included $6.9 million and $8.4 million , respectively, restricted for payment to associate vendors and $1.7 million and $1.9 million , respectively, restricted for other collateral accounts. At January 29, 2017 and October 30, 2016, short-term investments were $3.5 million and $3.6 million , respectively. These short-term investments consisted primarily of the fair value of deferred compensation investments corresponding to employees’ selections, primarily in mutual funds, based on quoted prices in active markets. |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision reflects the geographic mix of earnings in various federal, state and foreign tax jurisdictions and their applicable rates resulting in a composite effective tax rate. The Company’s cumulative results for substantially all United States and certain non-United States jurisdictions for the most recent three-year period is a loss. Accordingly, a valuation allowance has been established for substantially all loss carryforwards and other net deferred tax assets for these jurisdictions, resulting in an effective tax rate that is significantly different than the statutory rate. The Company's provision for income taxes primarily includes foreign jurisdictions and state taxes. The provision for income taxes in the first quarter of fiscal 2017 and 2016 was $0.6 million and $0.6 million , respectively. The Company's quarterly provision for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items that occur within the periods presented. The Company adjusts its effective tax rate for each quarter to be consistent with the estimated annual effective tax rate, consistent with Accounting Standards Codification (“ASC”) 270, “ Interim Reporting ,” and ASC 740-270, “ Income Taxes – Intra Period Tax Allocation .” Jurisdictions with a projected loss for the full year where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. The Company's future effective tax rates could be affected by earnings being different than anticipated in countries with differing statutory rates, increases in recorded valuation allowances of tax assets, or changes in tax laws. |
Debt
Debt | 3 Months Ended |
Jan. 29, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt In January 2017, the Company amended its $160.0 million financing program (“the Financing Program”) with PNC Bank, National Association (“PNC”). The key changes to the agreement were: (1) extend the termination date to January 31, 2018; (2) decrease the requirement under the minimum global liquidity covenant to $20.0 million , which increases to $25.0 million at the earlier of the sale of Maintech or receipt of the federal portion of the Company's IRS refund from the filing of amended tax returns for fiscal years 2004 through 2010, and then to $35.0 million after any time at which the Company pays a dividend or repurchase shares of our stock; (3) reduce the unbilled receivables eligibility from 15% to 10% , (4) permits a $5.0 million basket for supply chain finance receivables and (5) introduce a performance covenant requiring a minimum level of Earnings Before Interest and Taxes (“EBIT”), as defined, which is measured quarterly. The amendment also prohibits distributions until both Maintech is sold and the aforementioned IRS refund is received. When these two transactions occur, up to $0.5 million in distributions can be made per fiscal quarter provided that liquidity is at least $40.0 million after the distribution. All other material terms and conditions remain substantially unchanged, including interest rates. The Financing Program is secured by receivables from certain Staffing Services businesses in the United States, Europe and Canada that are sold to a wholly-owned, consolidated, bankruptcy remote subsidiary. The bankruptcy remote subsidiary's sole business consists of the purchase of the receivables and subsequent granting of a security interest to PNC under the program, and its assets are available first to satisfy obligations to PNC and are not available to pay creditors of the Company's other legal entities. Borrowing capacity under the Financing Program is directly impacted by the level of accounts receivable. At January 29, 2017, the accounts receivable borrowing base was $142.5 million . In addition to customary representations, warranties and affirmative and negative covenants, the program is subject to termination under standard events of default including change of control, failure to pay principal or interest, breach of the liquidity or performance covenants, triggering of portfolio ratio limits, or other material adverse events, as defined. At January 29, 2017, the Company was in compliance with all debt covenant requirements. The Financing Program has an accordion feature under which the facility limit can be increased up to $250.0 million subject to credit approval from PNC. Borrowings are priced based upon a fixed program rate plus the daily adjusted one-month LIBOR index, as defined. The program also contains a revolving credit provision under which proceeds can be drawn for a definitive tranche period of 30, 60, 90 or 180 days priced at the adjusted LIBOR index rate in effect for that period. In addition to United States dollars, drawings can be denominated in Canadian dollars, subject to a Canadian dollar $30.0 million limit, and British Pounds Sterling, subject to a £20.0 million limit. The program also includes a letter of credit sublimit of $50.0 million and minimum borrowing requirements. As of January 29, 2017, there were no foreign currency denominated borrowings, and the letter of credit participation was $31.0 million inclusive of $28.9 million for the Company's casualty insurance program and $2.1 million for the security deposit required under the Orange facility lease agreement. At both January 29, 2017 and October 30, 2016, the Company had outstanding borrowings under this program of $95.0 million that bore a weighted average annual interest rate of 2.6% and 2.3% , respectively, which is inclusive of certain facility fees. At January 29, 2017, there was $16.4 million additional availability under this program, exclusive of the potential availability under the aforementioned accordion feature. In February 2016, Maintech, as borrower, entered into a $10.0 million 364 -day secured revolving credit agreement with Bank of America, N.A. The credit agreement provides for revolving loans as well as a $0.1 million sub-line for letters of credit and is subject to borrowing base and availability restrictions and requirements. The credit agreement is secured by assets of the borrower, including accounts receivable, and the Company has guaranteed the obligations of the borrower under the agreement not to exceed $3.0 million . The credit agreement contains certain customary representations and warranties, events of default and affirmative and negative covenants, including a minimum interest requirement based on $2.0 million drawn. At both January 29, 2017 and October 30, 2016, the amount outstanding was $2.1 million with $2.7 million and $3.3 million of additional availability, respectively. Upon the sale of Maintech, the then outstanding balance is required to be satisfied. The borrower may optionally terminate the credit agreement and repay the borrowings prior to the expiration date, without premium or penalty at any time by the delivery of a notice to that effect as provided under the credit agreement. Borrowings will be used for working capital and general corporate purposes. Interest under the credit agreement is one month LIBOR plus 2.75% on drawn amounts and a fixed rate of 0.375% on undrawn amounts. Long-term debt consists of the following (in thousands): January 29, 2017 October 30, 2016 Financing programs $ 97,050 $ 97,050 Less: current portion 97,050 2,050 Total long-term debt $ — $ 95,000 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Jan. 29, 2017 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Three Months Ended January 29, 2017 January 31, 2016 Numerator Net loss $ (4,577 ) $ (10,962 ) Denominator Basic weighted average number of shares 20,918 20,813 Diluted weighted average number of shares 20,918 20,813 Net loss per share: Basic $ (0.22 ) $ (0.53 ) Diluted $ (0.22 ) $ (0.53 ) Options to purchase 1,866,545 and 945,578 shares of the Company’s common stock were outstanding at January 29, 2017 and January 31, 2016, respectively. Additionally, there were 230,014 and 8,159 unvested restricted shares outstanding at January 29, 2017 and January 31, 2016, respectively. The options were not included in the computation of diluted loss per share in the first quarter of fiscal 2017 and 2016 because the effect of their inclusion would have been anti-dilutive as a result of the Company’s net loss position in those periods. |
Restructuring and Severance Cos
Restructuring and Severance Costs | 3 Months Ended |
Jan. 29, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Severance Costs | Restructuring and Severance Costs The Company implemented a cost reduction plan in fiscal 2016 and incurred restructuring and severance costs primarily resulting from a reduction in workforce, facility consolidation and lease termination costs. The total costs incurred to date are approximately $6.4 million consisting of $1.2 million in North American Staffing, $0.7 million in International Staffing, $0.4 million in Technology Outsourcing Services and Solutions and $4.1 million in Corporate and Other. The Company incurred total restructuring and severance costs of approximately $0.6 million for the three months ended January 29, 2017 and $2.8 million for the three months ended January 31, 2016. The following table presents the restructuring and severance costs for the three months ended January 29, 2017 (in thousands): Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other Severance and benefit costs $ 610 $ 75 $ 17 $ 53 $ 465 Other 14 21 (7 ) — — Total costs $ 624 $ 96 $ 10 $ 53 $ 465 Accrued restructuring and severance costs are included in Accrued compensation and Accrued insurance and other in the Condensed Consolidated Balance Sheets. Activity for the three months ended January 29, 2017 are summarized as follows (in thousands): January 29, 2017 Beginning balance $ 1,653 Charged to expense 624 Cash payments (1,076 ) Ending balance $ 1,201 The remaining charges as of January 29, 2017 of $1.2 million , primarily related to Corporate and Other, are expected to be paid through the second quarter of fiscal 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jan. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is involved in various claims and legal actions arising in the ordinary course of business. The Company’s loss contingencies not discussed elsewhere consist primarily of claims and legal actions arising in the normal course of business related to contingent worker employment matters in the staffing services segment. These matters are at varying stages of investigation, arbitration or adjudication. The Company has accrued for losses on individual matters that are both probable and reasonably estimable. Estimates are based on currently available information and assumptions. Significant judgment is required in both the determination of probability and the determination of whether a matter is reasonably estimable. The Company’s estimates may change and actual expenses could differ in the future as additional information becomes available. |
Segment Data
Segment Data | 3 Months Ended |
Jan. 29, 2017 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data The Company’s strategic reorganization during fiscal 2016 and 2015 included the exit of non-core operations and significant changes in the management structure. The Company changed its operating and reportable segments during the fourth quarter of fiscal 2016 in connection with its new business strategies, aligning with the way the Company evaluates its business performance and manages its operations. Our current reportable segments are (i) North American Staffing, (ii) International Staffing and (iii) Technology Outsourcing Services and Solutions. The non-reportable businesses are combined and disclosed with corporate services under the category Corporate and Other. Accordingly, all prior periods have been recast to reflect the current segment presentation. The change in reportable segments did not have any impact on previously reported consolidated financial results. Segment operating income (loss) is comprised of segment net revenue less cost of services, selling, administrative and other operating costs, impairment charges and restructuring and severance costs. The Company allocates to the segments all operating costs except for costs not directly related to our operating activities such as corporate-wide general and administrative costs. These costs are not allocated because doing so would not enhance the understanding of segment operating performance and are not used by management to measure segment performance. Effective in the first quarter of fiscal 2017, in an effort to simplify and refine its internal reporting, the Company modified its intersegment sales structure between North American Staffing and Technology, Outsourcing Services and Solutions segments. The resulting changes are as follows: • Intersegment revenue for North American Staffing from Technology, Outsourcing Services and Solutions is now based on a set percentage of direct labor dollars for recruiting and administrative services; and • The direct labor costs associated with the contingent employees placed by North American Staffing on behalf of Technology, Outsourcing Services and Solutions’ customers are now directly borne by the Technology, Outsourcing Services and Solutions segment instead of by North American Staffing. To provide period over period comparability, the Company has reclassified the prior period segment data to conform to the current presentation. This change does not have any impact on the consolidated financial results for any period presented. Financial data concerning the Company’s segment revenue and operating income (loss) as well as results from Corporate and Other are summarized in the following tables (in thousands): Three Months Ended January 29, 2017 Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other (1) Eliminations (2) Net revenue $ 313,024 $ 231,865 $ 30,350 $ 25,671 $ 26,296 $ (1,158 ) Cost of services 266,134 198,842 25,657 20,774 22,019 (1,158 ) Gross margin 46,890 33,023 4,693 4,897 4,277 — Selling, administrative and other operating costs 48,890 30,099 4,041 3,258 11,492 — Restructuring and severance costs 624 96 10 53 465 — Operating income (loss) (2,624 ) 2,828 642 1,586 (7,680 ) — Other income (expense), net (1,330 ) Income tax provision 623 Net loss $ (4,577 ) Three Months Ended January 31, 2016 Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other (1) Eliminations (2) Net revenue $ 326,968 $ 238,575 $ 33,951 $ 27,214 $ 30,405 $ (3,177 ) Cost of services 281,400 207,440 29,171 21,626 26,340 (3,177 ) Gross margin 45,568 31,135 4,780 5,588 4,065 — Selling, administrative and other operating costs 52,623 30,738 4,347 3,366 14,172 — Restructuring and severance costs 2,761 558 477 225 1,501 — Operating income (loss) (9,816 ) (161 ) (44 ) 1,997 (11,608 ) — Other income (expense), net (593 ) Income tax provision 553 Net loss $ (10,962 ) (1) Revenues are primarily derived from managed service programs and information technology infrastructure services. (2) The majority of intersegment sales results from North American Staffing providing resources to Technology Outsourcing Services and Solutions. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jan. 29, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Secured revolving credit agreement extension On February 17, 2017, Maintech amended the 364 -day secured revolving credit agreement with Bank of America, N.A. to extend the termination date of its credit facility (the “revolving credit facility”) by one month to March 17, 2017. The amended credit agreement permits the Company to maintain the revolving credit facility until the earlier of: (i) the date of the sale of Maintech, at which time the facility will be terminated; or (ii) the parties agree to further extend the termination date. All other terms and conditions remain unchanged. Sale of Maintech On March 6, 2017, the Company completed the sale of Maintech, Inc., our information technology infrastructure business, to Maintech Holdings, LLC, a newly-formed holding company and affiliate of Oak Lane Partners, LLC (“Buyer”). Under the terms of the agreement, the Company received proceeds of $18.3 million , subject to a $0.1 million holdback and certain adjustments including a customary working capital adjustment to be finalized within 60 days of the sale. Net proceeds from the transaction amounted to $13.9 million after certain transaction related fees, expenses and repayment of the Bank of America, N.A outstanding balance. Included within the terms of the agreement is a Transition Services Agreement (“TSA”) whereby the Company will continue to provide certain accounting and operational services to the Buyer. The Company will bill for the services provided to the Buyer for a period of up to six months after the date of sale. The Company and Maintech have also executed a three -year IT as a Service (“ITaaS”) agreement whereby Maintech will continue to provide helpdesk and network monitoring services similar to services that were provided before the transaction. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Jan. 29, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements of Volt Information Sciences, Inc. (“Volt” or the “Company”) have been prepared in conformity with generally accepted accounting principles, consistent in all material respects with those applied in the Annual Report on Form 10-K for the year ended October 30, 2016. The Company makes estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates and changes in estimates are reflected in the period in which they become known. Accounting for certain expenses, including income taxes, are based on full year assumptions, and the financial statements reflect all normal adjustments that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The interim information is unaudited and is prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), which provides for omission of certain information and footnote disclosures. This interim financial information should be read in conjunction with the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended October 30, 2016. Certain reclassifications have been made to the prior year financial statements in order to conform to the current year's presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements New Accounting Standards Not Yet Adopted by the Company In February 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and application of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The amendments are effective at the same time as the new revenue standard. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Public entities may apply the guidance earlier but only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company expects to adopt this ASU in the first quarter of fiscal 2019 and is currently assessing if there is any impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and other (Topic 350) . This ASU simplifies the accounting for goodwill impairment and removes Step 2 of the goodwill impairment test. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value limited to the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. The amendments in this update should be applied on a prospective basis and adopted for an entity’s annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company expects to adopt this ASU in the first quarter of fiscal 2022 and does not anticipate a significant impact upon adoption. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments: A Consensus of the FASB Emerging Issues Task Force . The amendments provide guidance on eight specific cash flow classification issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, corporate and bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company expects to adopt this ASU in the first quarter of fiscal 2019 and does not anticipate a significant impact upon adoption. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model. For public business entities that are SEC filers, the amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All entities may adopt the amendments in this update earlier as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects to adopt this ASU in the first quarter of fiscal 2020 and is in the process of assessing the impact that the adoption of this ASU will have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company expects to adopt this ASU in the first quarter of fiscal 2018 and does not anticipate a significant impact upon adoption. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. ASU 2016-02 is effective for us in our first quarter of fiscal 2020 on a modified retrospective basis. We have preliminarily evaluated the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements, and we currently expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon our adoption of ASU 2016-02, which will increase our total assets and total liabilities that we report relative to such amounts prior to adoption. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). This ASU is effective for the annual period ending after December 15, 2016, with early adoption permitted. The Company expects to adopt this ASU in the fourth quarter of fiscal 2017 and is in the process of assessing the impact that the adoption of this ASU will have on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of this amendment is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This standard is effective for fiscal years and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. Topic 606 is effective for the Company in the first quarter of fiscal 2019. After our preliminary assessment, we do not anticipate that the new guidance will have a material impact on our revenue recognition policies, practices or systems. As we continue to evaluate the impacts of our pending adoption of Topic 606 in fiscal 2017, our preliminary assessments are subject to change. From March through December 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, ASU No. 2016-11, Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting, ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. These amendments are intended to improve and clarify the implementation guidance of Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements of ASU No. 2014-09 and ASU No. 2015-14. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. Recently Adopted Accounting Standards In April 2015, the FASB issued ASU No. 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract and expense the cost as the services are received. This ASU was adopted by the Company in the first quarter of fiscal 2017 on a prospective basis. The Company does not currently have any projects that meet the criteria to be in scope of the internal-use software guidance and it did not have any impact on our consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs . The ASU requires that debt issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. In August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements . ASU 2015-15 clarifies the guidance in ASU 2015-03 regarding presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The SEC Staff announced they would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These ASUs were adopted by the Company in the first quarter of fiscal 2017. The Company has continued to defer and present debt issuance costs as an asset and to amortize the deferred issuance costs ratably over the term of the line-of-credit arrangement resulting in no impact on our consolidated financial statements. All other ASUs that became effective for Volt in the first quarter of fiscal 2017 were not applicable to the Company at this time and therefore did not have any impact during the period. |
Assets and Liabilities Held f22
Assets and Liabilities Held for Sale (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Held for Sale | The following table reconciles the major classes of assets and liabilities classified as held for sale as part of continuing operations in the Condensed Consolidated Balance Sheets (in thousands): January 29, 2017 October 30, 2016 Assets included as part of continuing operations Trade accounts receivable, net $ 15,087 $ 13,553 Recoverable income taxes 106 15 Other assets 3,264 3,339 Property, equipment and software, net 123 178 Purchased intangible assets 495 495 Total major classes of assets as part of continuing operations $ 19,075 $ 17,580 Liabilities included as part of continuing operations Accrued compensation $ 2,442 $ 2,432 Accounts payable 865 921 Accrued taxes other than income taxes 954 833 Accrued insurance and other 1,714 1,574 Total major classes of liabilities as part of continuing operations $ 5,975 $ 5,760 |
Accumulated Other Comprehensi23
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive loss for the three months ended January 29, 2017 were (in thousands): Foreign Currency Translation Accumulated other comprehensive loss at October 30, 2016 $ (10,612 ) Other comprehensive loss 527 Accumulated other comprehensive loss at January 29, 2017 $ (10,085 ) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of the following (in thousands): January 29, 2017 October 30, 2016 Financing programs $ 97,050 $ 97,050 Less: current portion 97,050 2,050 Total long-term debt $ — $ 95,000 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net loss per share is calculated as follows (in thousands, except per share amounts): Three Months Ended January 29, 2017 January 31, 2016 Numerator Net loss $ (4,577 ) $ (10,962 ) Denominator Basic weighted average number of shares 20,918 20,813 Diluted weighted average number of shares 20,918 20,813 Net loss per share: Basic $ (0.22 ) $ (0.53 ) Diluted $ (0.22 ) $ (0.53 ) |
Restructuring and Severance C26
Restructuring and Severance Costs (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table presents the restructuring and severance costs for the three months ended January 29, 2017 (in thousands): Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other Severance and benefit costs $ 610 $ 75 $ 17 $ 53 $ 465 Other 14 21 (7 ) — — Total costs $ 624 $ 96 $ 10 $ 53 $ 465 |
Schedule of Restructuring Reserve | Activity for the three months ended January 29, 2017 are summarized as follows (in thousands): January 29, 2017 Beginning balance $ 1,653 Charged to expense 624 Cash payments (1,076 ) Ending balance $ 1,201 |
Segment Data (Tables)
Segment Data (Tables) | 3 Months Ended |
Jan. 29, 2017 | |
Segment Reporting [Abstract] | |
Summary of Sales and Segment Operating Income (Loss) by Reportable Operating Segment | Financial data concerning the Company’s segment revenue and operating income (loss) as well as results from Corporate and Other are summarized in the following tables (in thousands): Three Months Ended January 29, 2017 Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other (1) Eliminations (2) Net revenue $ 313,024 $ 231,865 $ 30,350 $ 25,671 $ 26,296 $ (1,158 ) Cost of services 266,134 198,842 25,657 20,774 22,019 (1,158 ) Gross margin 46,890 33,023 4,693 4,897 4,277 — Selling, administrative and other operating costs 48,890 30,099 4,041 3,258 11,492 — Restructuring and severance costs 624 96 10 53 465 — Operating income (loss) (2,624 ) 2,828 642 1,586 (7,680 ) — Other income (expense), net (1,330 ) Income tax provision 623 Net loss $ (4,577 ) Three Months Ended January 31, 2016 Total North American Staffing International Staffing Technology Outsourcing Services and Solutions Corporate and Other (1) Eliminations (2) Net revenue $ 326,968 $ 238,575 $ 33,951 $ 27,214 $ 30,405 $ (3,177 ) Cost of services 281,400 207,440 29,171 21,626 26,340 (3,177 ) Gross margin 45,568 31,135 4,780 5,588 4,065 — Selling, administrative and other operating costs 52,623 30,738 4,347 3,366 14,172 — Restructuring and severance costs 2,761 558 477 225 1,501 — Operating income (loss) (9,816 ) (161 ) (44 ) 1,997 (11,608 ) — Other income (expense), net (593 ) Income tax provision 553 Net loss $ (10,962 ) (1) Revenues are primarily derived from managed service programs and information technology infrastructure services. (2) The majority of intersegment sales results from North American Staffing providing resources to Technology Outsourcing Services and Solutions. |
Discontinued Operations (Detail
Discontinued Operations (Details) - Computer Systems Segment - NewNet Communication Technologies, LLC - USD ($) $ in Millions | Dec. 01, 2014 | Jan. 29, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Note receivable | $ 10 | |
Interest rate | 0.50% | |
Payment term | 4 years | |
Capital interest percentage | 20.00% | |
Notes receivable, fair value | $ 8.4 | |
Unamortized discount | $ 1.1 |
Assets and Liabilities Held f29
Assets and Liabilities Held for Sale (Details) - Information Technology Infrastructure Support Service - USD ($) | 3 Months Ended | |
Jan. 29, 2017 | Oct. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Impairment of assets | $ 0 | |
Assets included as part of continuing operations | ||
Trade accounts receivable, net | 15,087,000 | $ 13,553,000 |
Recoverable income taxes | 106,000 | 15,000 |
Other assets | 3,264,000 | 3,339,000 |
Property, equipment and software, net | 123,000 | 178,000 |
Purchased intangible assets | 495,000 | 495,000 |
Total major classes of assets as part of continuing operations | 19,075,000 | 17,580,000 |
Liabilities included as part of continuing operations | ||
Accrued compensation | 2,442,000 | 2,432,000 |
Accounts payable | 865,000 | 921,000 |
Accrued taxes other than income taxes | 954,000 | 833,000 |
Accrued insurance and other | 1,714,000 | 1,574,000 |
Total major classes of liabilities as part of continuing operations | $ 5,975,000 | $ 5,760,000 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Loss (Details) $ in Thousands | 3 Months Ended |
Jan. 29, 2017USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Accumulated other comprehensive loss at October 30, 2016 | $ (10,612) |
Accumulated other comprehensive loss at January 29, 2017 | (10,085) |
Foreign Currency Translation | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Accumulated other comprehensive loss at October 30, 2016 | (10,612) |
Other comprehensive loss | 527 |
Accumulated other comprehensive loss at January 29, 2017 | $ (10,085) |
Restricted Cash and Short-Ter31
Restricted Cash and Short-Term Investments - Additional Information (Detail) - Restricted cash and short-term investments - USD ($) $ in Millions | Jan. 29, 2017 | Oct. 30, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 6.9 | $ 8.4 |
Short-term investments | 3.5 | 3.6 |
Short-Term Credit Facility | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted as collateral | $ 1.7 | $ 1.9 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision | $ 623 | $ 553 |
Debt - Additional Information (
Debt - Additional Information (Detail) £ in Millions, CAD in Millions | Feb. 17, 2017 | Jan. 29, 2017USD ($) | Feb. 29, 2016USD ($) | Jan. 29, 2017GBP (£) | Oct. 30, 2016USD ($) | Jan. 29, 2017CAD | Jan. 29, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Less: current portion | $ 2,050,000 | $ 97,050,000 | |||||
Total long-term debt | $ 95,000,000 | 0 | |||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility borrowing capacity | £ 20 | CAD 30 | 160,000,000 | ||||
Cash collateral of outstanding short-term borrowings | 20,000,000 | ||||||
Unbilled receivable percent | 10.00% | 15.00% | |||||
Maximum quarterly distribution if liquidity requirement is met | $ 500,000 | ||||||
Covenant terms, EBIT minimum to pay dividends | 40,000,000 | ||||||
Fair value of amount outstanding | 142,500,000 | ||||||
Maximum borrowing capacity | 250,000,000 | ||||||
Outstanding borrowing | $ 95,000,000 | 95,000,000 | |||||
Weighted average interest rate during period | 2.60% | 2.30% | |||||
Available borrowing capacity of facility | 16,400,000 | ||||||
Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility borrowing capacity | 50,000,000 | ||||||
Fair value of amount outstanding | 31,000,000 | ||||||
Casualty Insurance Program | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of amount outstanding | 28,900,000 | ||||||
Security Deposit | |||||||
Debt Instrument [Line Items] | |||||||
Fair value of amount outstanding | 2,100,000 | ||||||
Maintech, Incorporated | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility borrowing capacity | $ 100,000 | ||||||
Portion secured by parent | 3,000,000 | ||||||
Maintech, Incorporated | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility borrowing capacity | 10,000,000 | ||||||
Fair value of amount outstanding | $ 2,100,000 | 2,100,000 | |||||
Outstanding borrowing | $ 2,000,000 | ||||||
Available borrowing capacity of facility | 3,300,000 | 2,700,000 | |||||
Term | 364 days | ||||||
Commitment fee percentage | 0.375% | ||||||
Maintech, Incorporated | Revolving Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.75% | ||||||
Sale of Maintech or Receipt of IRS Refund | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Cash Collateral for Borrowed Securities, Contingent Maximum | 25,000,000 | ||||||
Dividend Payment or Stock Repurchase | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Cash Collateral for Borrowed Securities, Contingent Maximum | 35,000,000 | ||||||
Maximum | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Supply chain finance receivable | $ 5,000,000 | ||||||
Subsequent Event | Maintech, Incorporated | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term | 364 days | ||||||
Short Term Financing Program | |||||||
Debt Instrument [Line Items] | |||||||
Financing programs | $ 97,050,000 | $ 97,050,000 |
Earnings (Loss) Per Share - Sum
Earnings (Loss) Per Share - Summary of Basic and Diluted Net Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
Numerator | ||
NET LOSS | $ (4,577) | $ (10,962) |
Denominator | ||
Basic weighted average number of shares (shares) | 20,918 | 20,813 |
Dilutive weighted average number of shares (shares) | 20,918 | 20,813 |
Basic: | ||
Net loss per share (usd per share) | $ (0.22) | $ (0.53) |
Diluted: | ||
Net loss per share (usd per share) | $ (0.22) | $ (0.53) |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares | Jan. 29, 2017 | Jan. 31, 2016 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Restricted shares outstanding | 230,014 | 8,159 |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to purchase common stock outstanding | 1,866,545 | 945,578 |
Restructuring and Severance C36
Restructuring and Severance Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 14 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | Jan. 29, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance costs | $ 624 | $ 2,761 | $ 6,400 |
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 1,653 | ||
Charged to expense | 624 | ||
Cash payments | (1,076) | ||
Ending balance | 1,201 | 1,201 | |
Operating Segments | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 624 | ||
Operating Segments | Severance and benefit costs | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 610 | ||
Operating Segments | Other | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 14 | ||
Operating Segments | North American Staffing | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance costs | 1,200 | ||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 96 | ||
Operating Segments | North American Staffing | Severance and benefit costs | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 75 | ||
Operating Segments | North American Staffing | Other | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 21 | ||
Operating Segments | International Staffing | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance costs | 700 | ||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 10 | ||
Operating Segments | International Staffing | Severance and benefit costs | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 17 | ||
Operating Segments | International Staffing | Other | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | (7) | ||
Operating Segments | Technology Outsourcing Services and Solutions | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance costs | 400 | ||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 53 | ||
Operating Segments | Technology Outsourcing Services and Solutions | Severance and benefit costs | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 53 | ||
Operating Segments | Technology Outsourcing Services and Solutions | Other | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 0 | ||
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and severance costs | $ 4,100 | ||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 465 | ||
Corporate | Severance and benefit costs | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | 465 | ||
Corporate | Other | |||
Restructuring Reserve [Roll Forward] | |||
Charged to expense | $ 0 |
Segment Data - Summary of Sales
Segment Data - Summary of Sales and Segment Operating Income (Loss) by Reportable Operating Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | $ 313,024 | $ 326,968 |
Cost of services | 266,134 | 281,400 |
GROSS MARGIN | 46,890 | 45,568 |
Expenses | ||
Selling, administrative and other operating costs | 48,890 | 52,623 |
Restructuring and severance costs | 624 | 2,761 |
OPERATING LOSS | (2,624) | (9,816) |
Other income (expense), net | (1,330) | (593) |
Income tax provision | 623 | 553 |
NET LOSS | (4,577) | (10,962) |
Operating Segments | ||
Expenses | ||
OPERATING LOSS | ||
Operating Segments | North American Staffing | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | 231,865 | 238,575 |
Cost of services | 198,842 | 207,440 |
GROSS MARGIN | 33,023 | 31,135 |
Expenses | ||
Selling, administrative and other operating costs | 30,099 | 30,738 |
Restructuring and severance costs | 96 | 558 |
OPERATING LOSS | 2,828 | (161) |
Operating Segments | International Staffing | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | 30,350 | 33,951 |
Cost of services | 25,657 | 29,171 |
GROSS MARGIN | 4,693 | 4,780 |
Expenses | ||
Selling, administrative and other operating costs | 4,041 | 4,347 |
Restructuring and severance costs | 10 | 477 |
OPERATING LOSS | 642 | (44) |
Operating Segments | Technology Outsourcing Services and Solutions | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | 25,671 | 27,214 |
Cost of services | 20,774 | 21,626 |
GROSS MARGIN | 4,897 | 5,588 |
Expenses | ||
Selling, administrative and other operating costs | 3,258 | 3,366 |
Restructuring and severance costs | 53 | 225 |
OPERATING LOSS | 1,586 | 1,997 |
Corporate and Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | 26,296 | 30,405 |
Cost of services | 22,019 | 26,340 |
GROSS MARGIN | 4,277 | 4,065 |
Expenses | ||
Selling, administrative and other operating costs | 11,492 | 14,172 |
Restructuring and severance costs | 465 | 1,501 |
OPERATING LOSS | (7,680) | (11,608) |
Eliminations | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
NET REVENUE | (1,158) | (3,177) |
Cost of services | (1,158) | (3,177) |
GROSS MARGIN | 0 | 0 |
Expenses | ||
Selling, administrative and other operating costs | 0 | 0 |
Restructuring and severance costs | 0 | 0 |
OPERATING LOSS | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Mar. 06, 2017 | Feb. 17, 2017 | Feb. 29, 2016 |
Revolving Credit Facility | Maintech, Incorporated | |||
Subsequent Event [Line Items] | |||
Term | 364 days | ||
Revolving Credit Facility | Maintech, Incorporated | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Term | 364 days | ||
Term of extension | 1 month | ||
Disposed of by Sale | Maintech, Incorporated | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Consideration | $ 18.3 | ||
Working capital adjustment | $ 0.1 | ||
Working capital adjustment determination period | 60 days | ||
Proceeds from sale of business | $ 13.9 | ||
Service agreement term | 3 years |