FOR IMMEDIATE RELEASE
Volt Information Sciences Reports Fiscal 2015 Third Quarter Financial Results
NEW YORK, NY, September 10, 2015 – Volt Information Sciences, Inc. (NYSE-MKT: VISI), an international provider of staffing services and information technology infrastructure services, today reported results for its third quarter ended August 2, 2015. Key elements include:
| | · | Net revenue of $364.7 million down 13.7% year-over-year |
| | · | Net loss of $4.1 million, or $0.7 million excluding special items |
| | · | Completed the sale of Volt Directories S.A. Ltd. and Tainol S.A., the Company’s Uruguayan publishing and printing business |
| | · | Subsequent to the end of the quarter, completed the sale of certain assets of Volt Telecommunications Group |
| | · | Established a new one-year $150.0 million Short-Term Financing Program with PNC Bank, which increased borrowing capacity |
“I look forward to building on the strengths of our business to achieve our longer-term goal of returning Volt to profitable growth,” commented Michael Dean, Chairman, Interim President and CEO. “During the third quarter we made good progress on our strategic initiative to divest non-core assets with the completion of the sale of our unprofitable Uruguayan publishing and printing business. Subsequent to the end of the quarter we also completed the sale of certain assets of Volt Telecommunications Group, which will further enhance our operational focus on our core staffing business and improve profitability in the future. In addition, our efforts to improve our balance sheet and strengthen our liquidity position continue to bear fruit with the closing of a new one-year, $150.0 million short-term financing program with PNC Bank. I am also pleased with our ongoing initiatives to reduce expenses and improve our cost structure, as evidenced by the decrease in selling, administrative and other operating costs of $3.8 million, or 7.0%, compared to the third quarter last year.”
Mr. Dean concluded, “We are actively pursuing advanced technologies and improving business processes to support our core staffing business. Our management team is energized, excited and working with a sense of urgency to address the challenges that face us and to capitalize on the opportunities that lie ahead. With the recent changes in Volt’s leadership, we are taking a fresh look at how we operate and by empowering our employees to make positive changes, I believe these actions will lead to a significant improvement in our financial performance in the quarters and years ahead.”
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 2 of 11
Fiscal 2015 Third Quarter Results
Total revenue for the fiscal 2015 third quarter was $364.7 million compared to $422.6 million for the third quarter of fiscal 2014. Staffing Services segment revenue decreased to $341.4 million from $397.0 million in the same period last year, while Other segment revenue was $23.3 million in the third quarter compared to $25.7 million in the third quarter last year.
Staffing Services segment operating income in the third quarter of 2015 of $3.4 million included $2.5 million of special items related to impairment charges and restructuring costs. Excluding the impact of these special items, Staffing Services segment operating income would have been $5.9 million on a Non-GAAP basis.
Loss from continuing operations in the fiscal 2015 third quarter of $4.1 million included special items of $3.4 million. Excluding these items loss from continuing operations for the third quarter of 2015 would have been $0.7 million on a Non-GAAP basis.
Adjusted EBITDA, which is also a non-GAAP measure, was $3.4 million in the fiscal 2015 third quarter. Adjusted EBITDA excludes the impact of interest expense, income tax expense, depreciation and amortization expense, other income/loss and share-based compensation expense. For a reconciliation of the GAAP and non-GAAP financial results, please see the tables at the end of this press release.
Fiscal 2015 Year-to-Date Results
Total revenue for the first nine months of fiscal 2015 was $1,132.9 million compared to $1,280.4 million for the first nine months of fiscal 2014. Staffing Services segment revenue decreased to $1,064.5 million from $1,196.0 million in the same period last year, while Other segment revenue was $68.4 million in the first nine months compared to $84.4 million in the comparable period last year.
Loss from continuing operations in the first nine months of fiscal 2015 of $19.9 million included special items of $13.4 million. Excluding these items the loss from continuing operations in 2015 would have been $6.5 million on a Non-GAAP basis.
Short-Term Financing Program
On August 1, 2015, the Company entered into a one-year, $150.0 million Short-Term Financing Program with PNC Bank, National Association (“PNC”) with an expiration date of July 28, 2016. This program replaced the Company’s previous short-term financing program. Proceeds from the new program were used to satisfy the outstanding balance under the previous program. Borrowing capacity will increase by at least $24.0 million resulting primarily from the inclusion of receivables in the United Kingdom and Canada. The Company will utilize available borrowing capacity, as needed, to provide funding for working capital purposes in addition to funding ongoing and future strategic initiatives.
On September 4, 2015, the Company had available liquidity of approximately $46.1 million.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal 2015 third quarter financial results will be held today at 5:00 p.m. Eastern / 2:00 p.m. Pacific. Volt’s Chairman, Interim President and CEO Michael Dean and CFO Paul Tomkins will host the conference call. Participants can listen in via webcast by visiting the Investor & Governance section of Volt’s website at www.volt.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software.
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 3 of 11
The conference call can also be accessed by dialing 877-407-9039 (201-689-8470 for international callers) and reference the “Volt Information Sciences Earnings Conference Call”. Following the call, an audio replay will also be available by calling 877-870-5176 or +1 858-384-5517 and entering the Conference ID# 13619056. A replay of the webcast will also be available for 90 days upon completion of the call, accessible through the Company’s website at www.volt.com in the Investors & Governance section.
About Volt Information Sciences, Inc.
Volt Information Sciences, Inc. is an international provider of staffing services (traditional time and materials based as well as project based) and information technology infrastructure services. Our staffing services consists of workforce solutions that include providing contingent workers, personnel recruitment services, and managed staffing services programs supporting primarily professional administration, technical, information technology, light-industrial and engineering positions. Our project-based staffing assists with individual customer assignments as well as customer care call centers and gaming industry quality assurance testing services, and our managed service programs consist of managing the procurement and on-boarding of contingent workers from multiple providers. Our information technology infrastructure services provide server, storage, network and desktop IT hardware maintenance, data center and network monitoring and operations. For more information visit www.volt.com.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to a number of known and unknown risks, including, among others, general economic, competitive and other business conditions, the degree and timing of customer utilization and rate of renewals of contracts with the company, and the degree of success of business improvement initiatives that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements are contained in company reports filed with the Securities and Exchange Commission. Copies of the company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission, are available without charge upon request to Volt Information Sciences, Inc., 1065 Avenue of the Americas, New York, New York 10018, Attention: Shareholder Relations, 212-704-7921. These and other SEC filings by the company are also available to the public over the Internet at the SEC’s website at http://www.sec.gov and at the company’s website at http://www.volt.com in the Investor & Governance section.
Investor Contacts:
Paul Tomkins
Volt Information Sciences, Inc.
voltinvest@volt.com
212-704-7921
Lasse Glassen
Addo Communications
lasseg@addocommunications.com
424-238-6249
--Financial Tables to Follow--
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 5 of 11
Condensed Consolidated Results of Operations by Segment
Unaudited (in thousands)
Results of Operations by Segment (Third Quarter 2015 vs. Third Quarter 2014)
| | | Three months ended August 2, 2015 | | | Three months ended August 3, 2014 | |
| | | Total | | | Staffing Services | | | Other | | | Total | | | Staffing Services | | | Other | |
| Revenue | | | | | | | | | | | | | | | | | | |
| Staffing services revenue | | $ | 341,383 | | | $ | 341,383 | | | $ | - | | | $ | 396,979 | | | $ | 396,979 | | | $ | - | |
| Other revenue | | | 23,285 | | | | - | | | | 23,285 | | | | 25,670 | | | | - | | | | 25,670 | |
| Net revenue | | | 364,668 | | | | 341,383 | | | | 23,285 | | | | 422,649 | | | | 396,979 | | | | 25,670 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Direct cost of staffing services revenue | | | 288,689 | | | | 288,689 | | | | - | | | | 337,285 | | | | 337,285 | | | | - | |
| Cost of other revenue | | | 19,696 | | | | - | | | | 19,696 | | | | 22,319 | | | | - | | | | 22,319 | |
| Selling, administrative and other operating costs | | | 50,955 | | | | 46,792 | | | | 4,163 | | | | 54,809 | | | | 50,447 | | | | 4,362 | |
| Restructuring costs | | | 400 | | | | 341 | | | | 59 | | | | 141 | | | | 42 | | | | 99 | |
| Impairment charges | | | 580 | | | | 2,130 | | | | (1,550 | ) | | | - | | | | - | | | | - | |
| Segment operating income (loss) | | | 4,348 | | | | 3,431 | | | | 917 | | | | 8,095 | | | | 9,205 | | | | (1,110 | ) |
| Corporate general and administrative | | | 5,935 | | | | | | | | | | | | 3,022 | | | | | | | | | |
| Corporate restructuring costs | | | 1,467 | | | | | | | | | | | | - | | | | | | | | | |
| Operating income (loss) | | | (3,054 | ) | | | | | | | | | | | 5,073 | | | | | | | | | |
| Other income (expense), net | | | 261 | | | | | | | | | | | | (930 | ) | | | | | | | | |
| Income tax provision | | | 1,351 | | | | | | | | | | | | 738 | | | | | | | | | |
| Income (loss) from continuing operations | | | (4,144 | ) | | | | | | | | | | | 3,405 | | | | | | | | | |
| Loss from discontinued operations, net of taxes | | | - | | | | | | | | | | | | (3,885 | ) | | | | | | | | |
| Net loss | | $ | (4,144 | ) | | | | | | | | | | $ | (480 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations | | $ | (0.20 | ) | | | | | | | | | | $ | 0.16 | | | | | | | | | |
| Loss from discontinued operations | | | - | | | | | | | | | | | | (0.19 | ) | | | | | | | | |
| Net loss | | $ | (0.20 | ) | | | | | | | | | | $ | (0.03 | ) | | | | | | | | |
| Weighted average number of shares | | | 20,741 | | | | | | | | | | | | 20,866 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted: | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations | | $ | (0.20 | ) | | | | | | | | | | $ | 0.16 | | | | | | | | | |
| Loss from discontinued operations | | | - | | | | | | | | | | | | (0.18 | ) | | | | | | | | |
| Net loss | | $ | (0.20 | ) | | | | | | | | | | $ | (0.02 | ) | | | | | | | | |
| Weighted average number of shares | | | 20,741 | | | | | | | | | | | | 21,072 | | | | | | | | | |
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 6 of 11
Condensed Consolidated Results of Operations by Segment
Unaudited (in thousands)
Results of Operations by Segment (Nine Months 2015 vs. Nine Months 2014)
| | | Nine months ended August 2, 2015 | | | Nine months ended August 3, 2014 | |
| | | Total | | | Staffing
Services | | | Other | | | Total | | | Staffing Services | | | Other | |
| Revenue | | | | | | | | | | | | | | | | | | |
| Staffing services revenue | | $ | 1,064,481 | | | $ | 1,064,481 | | | $ | - | | | $ | 1,195,981 | | | $ | 1,195,981 | | | $ | - | |
| Other revenue | | | 68,442 | | | | - | | | | 68,442 | | | | 84,376 | | | | - | | | | 84,376 | |
| Net revenue | | | 1,132,923 | | | | 1,064,481 | | | | 68,442 | | | | 1,280,357 | | | | 1,195,981 | | | | 84,376 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Direct cost of staffing services revenue | | | 904,624 | | | | 904,624 | | | | - | | | | 1,022,003 | | | | 1,022,003 | | | | - | |
| Cost of other revenue | | | 59,210 | | | | - | | | | 59,210 | | | | 70,518 | | | | - | | | | 70,518 | |
| Selling, administrative and other operating costs | | | 159,221 | | | | 147,406 | | | | 11,815 | | | | 173,414 | | | | 159,947 | | | | 13,467 | |
| Restructuring costs | | | 651 | | | | 616 | | | | 35 | | | | 1,477 | | | | 1,276 | | | | 201 | |
| Impairment charges | | | 5,954 | | | | 3,107 | | | | 2,847 | | | | - | | | | - | | | | - | |
| Segment operating income (loss) | | | 3,263 | | | | 8,728 | | | | (5,465 | ) | | | 12,945 | | | | 12,755 | | | | 190 | |
| Corporate general and administrative | | | 15,291 | | | | | | | | | | | | 10,642 | | | | | | | | | |
| Corporate restructuring costs | | | 2,442 | | | | | | | | | | | | 320 | | | | | | | | | |
| Restatement, investigations and remediation | | | - | | | | | | | | | | | | 3,261 | | | | | | | | | |
| Operating loss | | | (14,470 | ) | | | | | | | | | | | (1,278 | ) | | | | | | | | |
| Other income (expense), net | | | (2,125 | ) | | | | | | | | | | | (2,556 | ) | | | | | | | | |
| Income tax provision | | | 3,262 | | | | | | | | | | | | 4,062 | | | | | | | | | |
| Loss from continuing operations | | | (19,857 | ) | | | | | | | | | | | (7,896 | ) | | | | | | | | |
| Loss from discontinued operations, net of taxes | | | (4,519 | ) | | | | | | | | | | | (13,153 | ) | | | | | | | | |
| Net loss | | $ | (24,376 | ) | | | | | | | | | | $ | (21,049 | ) | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss from continuing operations | | $ | (0.95 | ) | | | | | | | | | | $ | (0.38 | ) | | | | | | | | |
| Loss from discontinued operations | | | (0.22 | ) | | | | | | | | | | | (0.63 | ) | | | | | | | | |
| Net loss | | $ | (1.17 | ) | | | | | | | | | | $ | (1.01 | ) | | | | | | | | |
| Weighted average number of shares | | | 20,821 | | | | | | | | | | | | 20,859 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Diluted: | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss from continuing operations | | $ | (0.95 | ) | | | | | | | | | | $ | (0.38 | ) | | | | | | | | |
| Loss from discontinued operations | | | (0.22 | ) | | | | | | | | | | | (0.63 | ) | | | | | | | | |
| Net loss | | $ | (1.17 | ) | | | | | | | | | | $ | (1.01 | ) | | | | | | | | |
| Weighted average number of shares | | | 20,821 | | | | | | | | | | | | 20,859 | | | | | | | | | |
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 7 of 11
Condensed Consolidated Statements of Cash Flows
Unaudited (in thousands)
| | | | |
| | | | | | | |
| Cash and cash equivalents, beginning of the period | | $ | 9,105 | | | $ | 9,847 | |
| | | | | | | | | |
| Changes in operating assets and liabilities | | | 21,086 | | | | 28,202 | |
| Cash (used in) provided by all other operating activities | | | (7,017 | ) | | | 1,868 | |
| Net cash provided by operating activities | | | 14,069 | | | | 30,070 | |
| | | | | | | | | |
| Net cash used in investing activities | | | (4,301 | ) | | | (84 | ) |
| | | | | | | | | |
| Net release of cash restricted as collateral for borrowings | | | 10,436 | | | | 6,807 | |
Net change in short-term borrowings | | | (3,506 | ) | | | (24,853 | ) |
| Purchases of common stock under repurchase program | | | (4,262 | ) | | | - | |
| Net cash used in all other financing activities | | | (172 | ) | | | (623 | ) |
| Net cash provided by (used in) financing activities | | | 2,496 | | | | (18,669 | ) |
| | | | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | | | (3,679 | ) | | | (104 | ) |
| | | | | | | | | |
| Net cash used in discontinued operations | | | (4,056 | ) | | | (11,878 | ) |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | 4,529 | | | | (665 | ) |
| | | | | | | | | |
| Change in cash from discontinued operations | | | (211 | ) | | | 188 | |
| | | | | | | | | |
| Cash and cash equivalents, end of the period | | $ | 13,423 | | | $ | 9,370 | |
| | | | | | | | | |
| Cash paid during the period: | | | | | | | | |
Interest | | $ | 2,435 | | | $ | 2,729 | |
| Income taxes | | $ | 1,638 | | | $ | 3,985 | |
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 8 of 11
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
| | | August 2, 2015 | | | November 2, 2014 | |
| ASSETS | | (unaudited) | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash and cash equivalents | | $ | 13,423 | | | $ | 9,105 | |
| Restricted cash and short-term investments | | | 12,196 | | | | 32,436 | |
| Trade accounts receivable, net of allowances of $828 and $868, respectively | | | 210,626 | | | | 248,101 | |
| Recoverable income taxes | | | 16,439 | | | | 18,311 | |
| Prepaid insurance and other current assets | | | 24,569 | | | | 26,255 | |
| Assets held for sale | | | - | | | | 24,220 | |
| TOTAL CURRENT ASSETS | | | 277,253 | | | | 358,428 | |
| Prepaid insurance and other assets, excluding current portion | | | 42,518 | | | | 39,600 | |
| Property, equipment and software, net | | | 22,772 | | | | 26,304 | |
| TOTAL ASSETS | | $ | 342,543 | | | $ | 424,332 | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Accrued compensation | | $ | 34,141 | | | $ | 41,182 | |
| Accounts payable | | | 35,196 | | | | 55,873 | |
| Accrued taxes other than income taxes | | | 19,734 | | | | 17,099 | |
| Accrued insurance and other | | | 35,080 | | | | 39,104 | |
| Deferred revenue, net, current portion | | | 1,855 | | | | 3,491 | |
| Short-term borrowings, including current portion of long-term debt | | | 125,968 | | | | 129,417 | |
| Liabilities held for sale | | | - | | | | 19,126 | |
| TOTAL CURRENT LIABILITIES | | | 251,974 | | | | 305,292 | |
| Accrued insurance and other, excluding current portion | | | 10,502 | | | | 11,874 | |
| Income taxes payable, excluding current portion | | | 8,738 | | | | 8,556 | |
| Long-term debt, excluding current portion | | | 6,482 | | | | 7,216 | |
| TOTAL LIABILITIES | | | 277,696 | | | | 332,938 | |
| Commitments and contingencies | | | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | | |
| Preferred stock, par value $1.00; Authorized - 500,000 shares; Issued – none | | | - | | | | - | |
Common stock, par value $0.10; Authorized - 120,000,000 shares; Issued - 23,738,003 and 23,610,103, respectively; Outstanding – 20,796,780 and 20,922,796, respectively | | | 2,374 | | | | 2,361 | |
| Paid-in capital | | | 75,461 | | | | 73,194 | |
| Retained earnings | | | 38,293 | | | | 64,119 | |
| Accumulated other comprehensive loss | | | (7,442 | ) | | | (6,400 | ) |
| Treasury stock, at cost; 2,941,223 shares and 2,687,307 shares, respectively | | | (43,839 | ) | | | (41,880 | ) |
TOTAL STOCKHOLDERS’ EQUITY | | | 64,847 | | | | 91,394 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 342,543 | | | $ | 424,332 | |
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 9 of 11
Unaudited Non-GAAP Statement of Operations and Reconciliations
(in thousands, except earnings per share)
| | | Three Months Ended August 2, 2015 | | | Three Months Ended August 3, 2014 | |
| | | GAAP | | | Special Items | | | Ref | | Non-GAAP | | | GAAP | | | Special Items | | | Ref | | Non-GAAP | |
| Revenue: | | | | | | | | | | | | | | | | | | | | | | |
| Staffing services revenue | | $ | 341,383 | | | $ | - | | | | | $ | 341,383 | | | $ | 396,979 | | | $ | - | | | | | $ | 396,979 | |
| Other revenue | | | 23,285 | | | | - | | | | | | 23,285 | | | | 25,670 | | | | - | | | | | | 25,670 | |
| Net Revenue | | | 364,668 | | | | - | | | | | | 364,668 | | | | 422,649 | | | | - | | | | | | 422,649 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Direct cost of staffing services revenue | | | 288,689 | | | | - | | | | | | 288,689 | | | | 337,285 | | | | - | | | | | | 337,285 | |
| Cost of other revenue | | | 19,696 | | | | - | | | | | | 19,696 | | | | 22,319 | | | | - | | | | | | 22,319 | |
| Selling, administrative and other operating costs | | | 56,890 | | | | (1,976 | ) | | (a) | | | 54,914 | | | | 57,831 | | | | - | | | | | | 57,831 | |
| Restructuring costs | | | 1,867 | | | | (1,867 | ) | | (b) | | | - | | | | 141 | | | | (141 | ) | | (e) | | | - | |
| Impairment charges | | | 580 | | | | (580 | ) | | (c) | | | - | | | | - | | | | | | | | | | - | |
| Total Expenses | | | 367,722 | | | | (4,423 | ) | | | | | 363,299 | | | | 417,576 | | | | (141 | ) | | | | | 417,435 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | (3,054 | ) | | | 4,423 | | | | | | 1,369 | | | | 5,073 | | | | 141 | | | | | | 5,214 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income (expense), net | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income (expense), net | | | (571 | ) | | | - | | | | | | (571 | ) | | | (788 | ) | | | - | | | | | | (788 | ) |
| Foreign exchange gain (loss), net | | | 1,010 | | | | (1,010 | ) | | (d) | | | - | | | | (134 | ) | | | 134 | | | (d) | | | - | |
| Other income (expense), net | | | (178 | ) | | | - | | | | | | (178 | ) | | | (8 | ) | | | - | | | | | | (8 | ) |
| Total other income (expense), net | | | 261 | | | | (1,010 | ) | | | | | (749 | ) | | | (930 | ) | | | 134 | | | | | | (796 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before income taxes | | | (2,793 | ) | | | 3,413 | | | | | | 620 | | | | 4,143 | | | | 275 | | | | | | 4,418 | |
| Income tax provision | | | 1,351 | | | | - | | | | | | 1,351 | | | | 738 | | | | - | | | | | | 738 | |
| Income (loss) from continuing operations | | $ | (4,144 | ) | | $ | 3,413 | | | | | $ | (731 | ) | | $ | 3,405 | | | $ | 275 | | | | | $ | 3,680 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| * Basic income (loss) from continuing operations | | $ | (0.20 | ) | | $ | 0.16 | | | | | $ | (0.04 | ) | | $ | 0.16 | | | $ | 0.01 | | | | | $ | 0.18 | |
| * Diluted income (loss) from continuing operations | | $ | (0.20 | ) | | $ | 0.16 | | | | | $ | (0.04 | ) | | $ | 0.16 | | | $ | 0.01 | | | | | $ | 0.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic weighted average number of shares | | | 20,741 | | | | 20,741 | | | | | | 20,741 | | | | 20,866 | | | | 20,866 | | | | | | 20,866 | |
| Diluted weighted average number of shares | | | 20,741 | | | | 20,741 | | | | | | 20,741 | | | | 21,072 | | | | 21,072 | | | | | | 21,072 | |
Special item adjustments consist of the following:
(a) Relates primarily to stock-based compensation granted to our new Board of Directors of $1.5 million and $0.5 million of legal and other items.
(b) Relates primarily to severance charges associated with the departure of our former Chief Executive Officer ($1.5 million).
(c) Relates primarily to the impairment of capitalized internally developed software as well as an adjustment to the impairment of net assets.
(d) Relates to non-cash foreign exchange translation gain or loss on our intercompany balances.
(e) Relates to severance charges primarily in our Other segment.
* Earnings per share may not add in certain periods due to rounding.
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 10 of 11
Unaudited Non-GAAP Statement of Operations and Reconciliations
(in thousands, except earnings per share)
| | | Nine Months Ended August 2, 2015 | | | Nine Months Ended August 3, 2014 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Revenue: | | | | | | | | | | | | | | | | | | | | | | |
| Staffing services revenue | | $ | 1,064,481 | | | $ | - | | | | | $ | 1,064,481 | | | $ | 1,195,981 | | | $ | - | | | | | $ | 1,195,981 | |
| Other revenue | | | 68,442 | | | | - | | | | | | 68,442 | | | | 84,376 | | | | - | | | | | | 84,376 | |
| Net revenue | | | 1,132,923 | | | | - | | | | | | 1,132,923 | | | | 1,280,357 | | | | - | | | | | | 1,280,357 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Direct cost of staffing services revenue | | | 904,624 | | | | - | | | | | | 904,624 | | | | 1,022,003 | | | | - | | | | | | 1,022,003 | |
| Cost of other revenue | | | 59,210 | | | | - | | | | | | 59,210 | | | | 70,518 | | | | - | | | | | | 70,518 | |
| Selling, administrative and other operating costs | | | 174,512 | | | | (4,180 | ) | | (a) | | | 170,332 | | | | 184,056 | | | | (500 | ) | | (e) | | | 183,556 | |
| Restructuring costs | | | 3,093 | | | | (3,093 | ) | | (b) | | | - | | | | 1,797 | | | | (1,797 | ) | | (f) | | | - | |
| Impairment charges | | | 5,954 | | | | (5,954 | ) | | (c) | | | - | | | | - | | | | - | | | | | | - | |
| Restatement, investigations and remediation | | | - | | | | - | | | | | | - | | | | 3,261 | | | | (3,261 | ) | | | | | - | |
| Total expenses | | | 1,147,393 | | | | (13,227 | ) | | | | | 1,134,166 | | | | 1,281,635 | | | | (5,558 | ) | | | | | 1,276,077 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | (14,470 | ) | | | 13,227 | | | | | | (1,243 | ) | | | (1,278 | ) | | | 5,558 | | | | | | 4,280 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income (expense), net | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income (expense), net | | | (1,935 | ) | | | - | | | | | | (1,935 | ) | | | (2,450 | ) | | | - | | | | | | (2,450 | ) |
| Foreign exchange gain (loss), net | | | (153 | ) | | | 153 | | | (d) | | | - | | | | (376 | ) | | | 376 | | | (d) | | | - | |
| Other income (expense), net | | | (37 | ) | | | - | | | | | | (37 | ) | | | 270 | | | | - | | | | | | 270 | |
| Total other income (expense), net | | | (2,125 | ) | | | 153 | | | | | | (1,972 | ) | | | (2,556 | ) | | | 376 | | | | | | (2,180 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations before income taxes | | | (16,595 | ) | | | 13,380 | | | | | | (3,215 | ) | | | (3,834 | ) | | | 5,934 | | | | | | 2,100 | |
| Income tax provision | | | 3,262 | | | | - | | | | | | 3,262 | | | | 4,062 | | | | - | | | | | | 4,062 | |
| Income (loss) from continuing operations | | $ | (19,857 | ) | | $ | 13,380 | | | | | $ | (6,477 | ) | | $ | (7,896 | ) | | $ | 5,934 | | | | | $ | (1,962 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| * Basic income (loss) from continuing operations | | $ | (0.95 | ) | | $ | 0.64 | | | | | $ | (0.31 | ) | | $ | (0.38 | ) | | $ | 0.28 | | | | | $ | (0.09 | ) |
| * Diluted income (loss) from continuing operations | | $ | (0.95 | ) | | $ | 0.64 | | | | | $ | (0.31 | ) | | $ | (0.38 | ) | | $ | 0.28 | | | | | $ | (0.09 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic weighted average number of shares | | | 20,821 | | | | 20,821 | | | | | | 20,821 | | | | 20,859 | | | | 20,859 | | | | | | 20,859 | |
| Diluted weighted average number of shares | | | 20,821 | | | | 20,821 | | | | | | 20,821 | | | | 20,859 | | | | 20,859 | | | | | | 20,859 | |
Special item adjustments consist of the following:
| | (a) | Relates primarily to stock-based compensation granted to our new Board of Directors of $1.5 million, costs incurred with responding to activist shareholders and related Board of Directors search fees as well as legal and other items. |
| | (b) | Relates primarily to severance charges associated with the departure of our former Chief Executive Officer and Chief Financial Officer. |
| | (c) | Relates primarily to capitalized internally developed software, impairment of net assets in our publishing and printing business in Uruguay as well as impairment of goodwill related to our staffing business in Uruguay. |
| | (d) | Relates to non-cash foreign exchange translation gain or loss on our intercompany balances. |
| | (e) | Relates to special bonus provided to our Chief Financial Officer for the filing of our 2011 and 2012 Form 10-K. |
| | (f) | Relates to severance charges primarily in our Staffing segment from our divestiture of ProcureStaff and our traditional staffing restructuring. |
* Earnings per share may not add in certain periods due to rounding.
Volt Information Sciences Reports Fiscal 2015 Third Quarter Results
September 10, 2015
Page 11 of 11
Unaudited Reconciliation of Non-GAAP Income (Loss) from Continuing Operations
to Adjusted EBITDA
(in thousands)
| | | | |
| | | | | | | |
| | | | | | | |
| Non-GAAP income (loss) from continuing operations | | $ | (731 | ) | | $ | 3,680 | |
| | | | | | | | | |
| Adjustments: | | | | | | | | |
| Depreciation and amortization | | | 1,700 | | | | 1,953 | |
| Share-based compensation expense (a) | | | 340 | | | | 72 | |
| Other (income) loss, net (b) | | | 749 | | | | 796 | |
| Provision for income taxes | | | 1,351 | | | | 738 | |
| Adjusted EBITDA | | $ | 3,409 | | | $ | 7,239 | |
| | | | |
| | | | | | | |
| | | | | | | |
| Non-GAAP income (loss) from continuing operations | | $ | (6,477 | ) | | $ | (1,962 | ) |
| | | | | | | | | |
| Adjustments: | | | | | | | | |
| Depreciation and amortization | | | 5,110 | | | | 7,218 | |
| Share-based compensation expense (a) | | | 1,058 | | | | 398 | |
| Other (income) loss, net (b) | | | 1,972 | | | | 2,180 | |
| Provision for income taxes | | | 3,262 | | | | 4,062 | |
| Adjusted EBITDA | | $ | 4,925 | | | $ | 11,896 | |
(a) Excludes stock-based compensation granted to our new Board of Directors
(b) Includes interest income (expense) and other income (expense), net
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain non-GAAP financial information, which includes adjustments for special items, as additional information for its consolidated income (loss) from continuing operations, segment operating income (loss) and adjusted EBITDA. These measures are not in accordance with, or an alternative for, generally accepted accounting principles (“GAAP”) and may be different from Non-GAAP measures reported by other companies. The Company believes that the presentation of these Non-GAAP measures provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations because it permits evaluation of the results of the Company’s continuing operations without the effect of special items that management believes make it more difficult to understand and evaluate the Company’s results of operations.
