Volt Information Sciences Reports Fiscal 2019 Second Quarter Financial Results
NEW YORK, NY, June 5, 2019 – Volt Information Sciences, Inc. (“Volt” or the “Company”) (NYSE-AMERICAN: VISI), an international provider of staffing services and managed service programs, today reported results for its fiscal 2019 second quarter and six months ended April 28, 2019.
Key highlights include:
| ● | Second quarter total Company net revenue decreased 4.2% year-over-year, or 3.3% on a same-store basis (excluding currency fluctuations and a business exited) |
| ● | Second quarter gross margin percentage improved 20 basis points, the third consecutive quarter of year-over-year margin growth |
| ● | Second quarter total Company net loss was $5.2 million, an improvement of 32.8% when compared to a year ago primarily driven by the increase in gross margin, as well as a 9.3% reduction in selling, administrative and other operating costs |
| ● | Second quarter total Company Adjusted EBITDA improved 58.9% when compared to a year ago |
| ● | For the six months ended April 28, 2019, total Company net revenue was $505.5 million, a decrease of 2.1%, year-over-year, or 1.4% on a same-store basis; Net loss for the six-month period was $8.4 million, an improvement of 54.4%, year-over-year |
| ● | Implemented further organizational enhancements to reduce costs and improve operational efficiencies and service delivery in the North American Staffing segment; commenced decommissioning of the Company’s Customer Care Solutions business unit |
Commenting on Volt’s performance, Linda Perneau, President and CEO, said, “Our performance in the second quarter reflects the ongoing execution of the operating strategy designed to significantly enhance our sales engine, improve margins and generate profitable growth. Despite revenue headwinds primarily from fluctuations in customer demand, the implementation of our sales and delivery strategy helped to substantially mitigate the top-line impact, while operational efficiencies and expense reductions bolstered Volt’s profitability metrics. We are well on our way on our transformation journey. I am grateful to our employees around the globe, all of whom are focused on driving top-line revenue, improving productivity and returning value to our shareholders.”
Fiscal 2019 Second Quarter Results
Total net revenue for the fiscal 2019 second quarter was $252.1 million, compared to $263.2 million in the second quarter of fiscal 2018. On a same-store basis, net revenue decreased 3.3% year-over-year excluding net revenue contributed from a business exited during the past year and the effect of currency fluctuations.
Volt Information Sciences Reports Fiscal 2019 Second Quarter Results
June 5, 2019
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Total gross margin in the second quarter of fiscal 2019 was 14.4%, an improvement of 20 basis points year-over-year. The margin improvement was driven by improved customer pricing and lower payroll taxes, partially offset by higher workers compensation expenses.
Selling, administrative and other operating costs in the second quarter of fiscal 2019 decreased $4.0 million, or 9.3%, to $38.9 million from $42.9 million in the second quarter of fiscal 2018. The improvement is primarily attributed to Volt’s ongoing cost reduction efforts in all areas of the business including lower labor and facility expenses. SG&A as a percent of revenue improved to 15.4% in the second quarter compared with 16.3% a year ago.
Net loss was $5.2 million in the second quarter of fiscal 2019, compared to $7.7 million in the second quarter of fiscal 2018.
Adjusted EBITDA, which is a Non-GAAP measure, was a loss of $1.5 million in the fiscal 2019 second quarter, compared to a loss of $3.7 million in the year ago period. Adjusted EBITDA excludes the impact of special items, interest expense, income taxes, depreciation and amortization expense, other income/loss and share-based compensation expense.
For a reconciliation of the GAAP and Non-GAAP financial results, please see the tables at the end of this press release.
Six Months Ended April 28, 2019 Financial Results
Total net revenue for the six months ended April 28, 2019 was $505.5 million, down $11.1 million, or 2.1%, compared to total net revenue of $516.6 million for the six months ended April 29, 2018. On a same-store basis, net revenue declined 1.4% year-over-year excluding net revenue contributed from a business exited during the past year and the effect of currency fluctuations.
Net loss was $8.4 million for the six months ended April 28, 2019, an improvement of $10.0 million, or 54.4% compared to net loss of $18.4 million in the same period of fiscal 2018. Adjusted net loss from continuing operations, which is a Non-GAAP measure, was $8.2 million for the six months ended April 28, 2019, compared to an adjusted net loss of $19.6 million in the same period of fiscal 2018. Adjusted EBITDA, which is a Non-GAAP measure, was a loss of $2.6 million for the six months ended April 28, 2019, an improvement of $10.2 million from a loss of $12.8 million in the year ago period.
For a reconciliation of the GAAP and Non-GAAP financial results, please see the tables at the end of this press release.
Business Developments
In the second quarter of fiscal 2019, the Company commenced efforts to decommission its Customer Care Solutions business unit, which is currently reported as a part of the Corporate and Other category. This will allow the Company to focus its attention and devote additional available resources to its core staffing business.
Also, during the second quarter of fiscal 2019, the Company changed leadership in its International Staffing segment, promoting Ben Batten to Senior Vice President and Managing Director, International. Mr. Batten was previously the Managing Director of Volt Asia and has over sixteen years of staffing experience abroad.
Volt Information Sciences Reports Fiscal 2019 Second Quarter Results
June 5, 2019
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Subsequent Events
On June 4, 2019, the Company entered into an amendment with DZ BANK AG Deutsche Zentral-Genossenschaftsbank. Under this Amendment, receivables due from a specific customer will be excluded from eligible receivables under the Company’s Financing Program for a three-month period while the customer resolves internal processing issues causing temporary payment delays. Volt anticipates a resolution no later than the end of its fiscal third quarter, at which time the receivables from this customer will be added back to the securitization pool under the original terms of the agreement.
Business Outlook
Volt’s outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially depending on market conditions and the factors set forth under “Forward-Looking Statements” below.
For the third quarter of fiscal 2019, the Company currently expects a consolidated same-store year-over-year net revenue decline similar to the decline experienced in the second quarter of fiscal 2019.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal 2019 second 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 Linda Perneau and CFO Paul Tomkins will host the conference call. Participants may listen in via webcast by visiting the Investor & Governance section of Volt’s website at www.volt.com. Please go to the website at least 15 minutes early to register, download and install any necessary audio software. The conference call can also be accessed by dialing 877-407-9039 (201-689-8470 for international callers) and reference the “Volt Information Sciences Earnings Conference Call.”
Following the call, an audio replay will be available beginning Wednesday, June 5, 2019 at 7:30 p.m. Eastern Time through Wednesday, June 19, 2019 at 11:59 p.m. Eastern Time. To access the replay, dial (844) 512-2921 (U.S.) or (412) 317-6671 (International) and enter the Conference ID #13690992. A replay of the webcast will also be available for 90 days upon completion of the call, accessible through the Investors section of the Company’s website at www.volt.com.
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). Our staffing services consist of workforce solutions that include providing contingent workers, personnel recruitment services, and managed staffing services programs supporting primarily administrative, technical, information technology, light-industrial and engineering positions. Our managed staffing programs involve managing the procurement and on-boarding of contingent workers from multiple providers. 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 2019 Second Quarter Results
June 5, 2019
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Forward-Looking Statements
This press release contains forward-looking statements, including the Company’s revenue outlook for the third quarter of 2019, 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 (“SEC”). Copies of the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the SEC, are available without charge upon request to Volt Information Sciences, Inc., 50 Charles Lindbergh Blvd., Suite 206, Uniondale NY 11553, Attention: Shareholder Relations. These and other SEC filings by the Company are also available to the public over the Internet at the SEC’s website at http://www.sec.gov and at the Company’s website at http://www.volt.com in the Investor & Governance section.
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, eliminating special items and the impact of businesses sold or exited provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations because they permit evaluation of the results of the Company without the effect of currency fluctuations, special items or the impact of businesses sold or exited that management believes make it more difficult to understand and evaluate the Company’s results of operations. Special items include impairments, restructuring and severance as well as certain income or expenses not indicative of the Company’s current or future period performance and are more fully disclosed in the tables.
Adjusted EBITDA is defined as earnings or loss before interest, income taxes, depreciation and amortization (“EBITDA”) adjusted to exclude share-based compensation expense as well as the special items described above.
Adjusted EBITDA is a performance measure rather than a cash flow measure. The Company believes the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management.
Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, analysis of the Company’s results of operations and operating cash flows as reported under GAAP. For example, Adjusted EBITDA does not reflect capital expenditures or contractual commitments; does not reflect changes in, or cash requirements for, the Company’s working capital needs; does not reflect the interest expense, or the cash requirements necessary to service the interest payments, on the Company’s debt; and does not reflect cash required to pay income taxes.
Volt Information Sciences Reports Fiscal 2019 Second Quarter Results
June 5, 2019
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The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because all companies do not calculate these measures in the same fashion.
Investor Contacts:
Volt Information Sciences, Inc.
voltinvest@volt.com
Lasse Glassen
Addo Investor Relations
lglassen@addoir.com
424-238-6249
—Financial Tables to Follow—
