North American Staffing revenue, which provides a broad spectrum of contingent staffing, direct placement, recruitment process outsourcing and other employment services, was $231.9 million, a $6.7 million, or 2.8% decrease compared to North American Staffing revenue of $238.6 million in the first quarter of fiscal 2016.
International Staffing revenue, which includes the Company’s contingent staffing, direct placement and managed programs businesses in Europe and Asia, was $30.4 million, down $3.6 million, or 10.6%, from the first quarter of fiscal 2016, primarily as a result of foreign exchange rate fluctuations of $4.5 million as well as a $0.9 million impact from no longer conducting business in certain unprofitable countries. On a constant currency basis and excluding the impact of countries the Company no longer conducts business in, International Staffing revenue increased $1.8 million, or 6.3%, year-over-year.
Technology Outsourcing Services and Solutions revenue, which provides quality assurance, business intelligence and analytics and customer service support for companies in a variety of industries, was $25.7 million, down $1.5 million, or 5.7%, compared to $27.2 million in the prior year period.
Corporate and Other revenue, which primarily consists of the Company’s North American managed service business and information technology infrastructure business was $26.3 million, down $4.1 million, or 13.5%, compared to $30.4 million in the first quarter of 2016.
Net loss of $4.6 million in the first quarter of fiscal 2017 improved by $6.4 million, or 58.2%, from the first quarter of fiscal 2016. Net loss in the first quarter included $0.6 million of restructuring and severance costs, partially offset by $0.5 million related to the amortization of the gain on the fiscal 2016 sale of real estate. Excluding the impact of these special items, net loss for the first quarter of 2017 would have been $4.5 million, which improved $3.1 million, or 42.0%, on a Non-GAAP basis compared to a net loss of $7.6 million (Non-GAAP) in the first quarter of fiscal 2016.
Adjusted EBITDA, which is also a Non-GAAP measure, was a loss of $0.5 million in the fiscal 2017 first quarter, which improved $4.3 million, or 90.0%, compared to a loss of $4.8 million (Non-GAAP) in the year ago period. Adjusted EBITDA excludes the impact of special items, 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.
Financing
During the first quarter, the Company amended its $160.0 million Financing Program with PNC to extend the program by one year to January 31, 2018. The amendment revised the existing minimum liquidity level from $35.0 million to $20.0 million with a step-up to $25.0 million triggered by the sale of Maintech, Inc. The amendment also established a new performance based covenant which includes an EBIT requirement.
Liquidity
As of January 29, 2017, the Company had $44.0 million of global liquidity for working capital requirements as compared to $44.7 million in the prior year period.
Volt Information Sciences Reports Fiscal 2017 First Quarter Results March 8, 2017 Page 3 of 10 |
Corporate Developments
| · | Sale of Maintech, Inc.—Subsequent to the end of the first quarter, the Company completed the sale of Maintech, Inc., its information technology infrastructure business. Under the terms of the agreement, the Company received proceeds of $18.3 million in cash, subject to 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 transaction related fees and repayment of the Bank of America, N.A. outstanding balance. |
| · | Tax Refunds—Subsequent to the end of the first quarter, the IRS approved the federal portion of the Company’s IRS refund from the filing of the Company’s amended tax returns for fiscal years 2004 through 2010. This will result in a refund of approximately $13 million and the Company is now awaiting payment. The remaining receivable of approximately $3 million primarily relates to state refunds which can now be applied for and finalized as a result of the IRS audit conclusion and are expected to be received over the next several quarters. |
| · | Board of Directors—Subsequent to the end of the first quarter, the Company announced that William J. Grubbs, President and CEO of Cross Country Healthcare, and Arnold Ursaner, founder of independent securities research firm CJS Securities, have been nominated to stand for election to the Company’s Board of Directors at the 2017 Annual Meeting of Shareholders. Volt also announced that current Director, John Rudolf, retired from the board effective February 23, 2017, and Mr. Grubbs has been appointed to fill the vacancy. In addition, current Director James Boone will be stepping down in June 2017. |
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal 2017 first quarter financial results will be held today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. Volt’s President and CEO Michael Dean and CFO Paul Tomkins will host the conference call. Participants can listen in via webcast by visiting the Investor & Governance section of Volt’s website at www.volt.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software. The conference call can also be accessed by dialing 877-407-9039 (201-689-8470 for international callers) and reference the “Volt Information Sciences Earnings Conference Call.”
Following the call, an audio replay will be available beginning Wednesday, March 8, 2017 at 7:30 p.m. Eastern Time through Wednesday, March 22, 2017 at 11:59 p.m. Eastern Time. To access the replay, dial 844-512-2921 (412-317-6671 for international callers) and enter the Conference ID # 13655615. A replay of the webcast will also be available for 90 days upon completion of the call, accessible through the Company’s website at www.volt.com in the Investors & Governance section.
About Volt Information Sciences, Inc.
Volt Information Sciences, Inc. is a global provider of staffing services (traditional time and materials-based as well as project-based), managed service programs and technology outsourcing services. Our staffing services consists of workforce solutions that include providing contingent workers, personnel recruitment services, and managed services programs supporting primarily professional administration, technical, information technology, light-industrial and engineering positions. Our managed service programs consist of managing the procurement and on-boarding of contingent workers from multiple providers. Our technology outsourcing services provide pre and post production development, testing and customer support to companies in the mobile, gaming, and technology devices industries. Our complementary businesses offer customized talent, technology and consulting solutions to a diverse client base. Volt services global industries including aerospace, automotive, banking and finance, consumer electronics, information technology, insurance, life sciences, manufacturing, media and entertainment, pharmaceutical, software, telecommunications, transportation, and utilities. For more information, visit www.volt.com.
Volt Information Sciences Reports Fiscal 2017 First Quarter Results March 8, 2017 Page 4 of 10 |
Forward-Looking Statements
This press release contains forward-looking statements that are subject to a number of known and unknown risks, including, among others, general economic, competitive and other business conditions, the degree and timing of customer utilization and rate of renewals of contracts with the Company, and the degree of success of business improvement initiatives that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements are contained in company reports filed with the Securities and Exchange Commission. Copies of the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission, are available without charge upon request to Volt Information Sciences, Inc., 1133 Avenue of the Americas, New York, New York 10036, Attention: Shareholder Relations, 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:
Volt Information Sciences, Inc.
voltinvest@volt.com
Lasse Glassen
Addo Investor Relations
lglassen@addoir.com
424-238-6249
--Financial Tables to Follow--
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. Accordingly, all prior periods have been recast to reflect the current segment presentation.
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain non-GAAP financial information, which includes adjustments for special items and certain line items on a constant currency basis, as additional information for its segment revenue, consolidated net income (loss), segment operating income (loss) and Adjusted EBITDA. These measures are not in accordance with, or an alternative for, generally accepted accounting principles (“GAAP”) and may be different from Non-GAAP measures reported by other companies.
The Company believes that the presentation of Non-GAAP measures on a constant currency basis and eliminating special items provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations because they permit evaluation of the results of the Company’s continuing operations without the effect of currency fluctuations or special items that management believes make it more difficult to understand and evaluate the Company’s results of operations. Special items include impairments, restructuring and severance as well as certain expenses or income not indicative of the Company’s current or future period performance and are more fully disclosed in the tables.
Adjusted EBITDA is defined as earnings or loss from continuing operations before interest, income taxes, depreciation and amortization (“EBITDA”) adjusted to exclude share-based compensation expense as well as the special items described above.
Adjusted EBITDA is a performance rather than a cash flow measure. The Company believes the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management.
