Exhibit 99.1
Volt Information Sciences Reports Increased Third Quarter Earnings
NEW YORK--(BUSINESS WIRE)--Sept. 9, 2003--Volt Information Sciences, Inc.
(NYSE: VOL) today reported financial results for the Company's third quarter and
nine-months ended August 3, 2003. Attached is a summary of the Company's results
of operations and notes thereto. The notes are an integral part of the summary.
The Company will conduct a conference call webcast at 11:00 A.M. (EDT)
today to discuss third quarter results. The conference call dial-in number is
1-800-857-4231, passcode: Third Quarter. The conference call will be broadcast
live over the Internet and can be accessed for the next 30 days at
http://www.volt.com/investor/press_release.cfm.
Third Quarter of Fiscal 2003 Results
For the third quarter ended August 3, 2003, the Company reported net income
of $2.1 million, or $0.14 per share, on net sales of $415.2 million, compared to
net income of $1.1 million, or $0.07 per share, on net sales of $371.8 million
for the comparable quarter of the previous year.
Nine Months of Fiscal 2003 Results
For the first nine-months of fiscal 2003, the Company reported a net loss
of $2.1 million, or $0.14 per share, on net sales of $1.2 billion, compared to a
net loss of $37.6 million, or $2.47 per share, on net sales of $1.1 billion, for
the comparable nine months of the previous year. The previous year's results
included non-recurring and other items as noted below.
Non-recurring items in the first nine months of fiscal 2002 results
included the following:
-- A non-recurring charge of $2.1 million, ($1.3 million net of taxes or
$0.08 per share), for the early payment of debt;
-- A net gain of $4.3 million, or $0.28 per share, including a tax
benefit of $1.7 million, from discontinued operations resulting from
the Company's sale of its 59% interest in Autologic Information
International, Inc. that comprised the Company's Electronic
Publication and Typesetting segment. The gain is comprised of a $4.5
million gain on the sale, partially offset by a $0.2 million loss on
operations through November 30, 2001, the date of sale; and
-- A non-cash charge of $31.9 million, or $2.10 per share, for goodwill
impairment as of November 5, 2001, presented as a Cumulative Effect of
a Change in Accounting.
The loss from continuing operations was $2.1 million, or $0.14 per share
for the nine months of fiscal 2003 compared to a loss of $10.0 million, or $0.65
per share for the first nine months of fiscal 2002.
"I am pleased to see the continued improvement in the operating results of
three of our segments, Directory, Computer Systems and Telecommunication
Services," commented William Shaw, Chairman and President of Volt. "All three
have shown significant improvement, both for the current quarter and the first
nine months of the year. Although emphasis on controllable costs, aggressive
marketing and creative products produced continued profits for the Staffing
segment, increased taxes and workers compensation insurance costs, as well as
fierce competition continue to dampen its results. Unfortunately, the country
has not yet returned to the growth required to rejuvenate the staffing industry
and allow for the necessary expansion of pricing and margins."
STAFFING SERVICES
The Staffing Services segment reported an operating profit for the third
quarter of $5.0 million compared to an operating profit of $6.1 million for the
comparable quarter of the previous year. Segment sales for the 2003 third
quarter were $348.4 million compared to $312.1 million for the comparable
quarter of the previous year. As in the first half of the year, third quarter
gross margin dollars produced by the increased revenue of the traditional
staffing divisions were more than offset by increased taxes, workers
compensation costs, and competitive pricing pressure. This is especially true in
the A&I (Administrative and Industrial) division where workers compensation and
taxes have a greater effect on margins due to lower pay rates. The operating
profit of VMC, the project management division, increased by 75% to $2.9 million
over the comparable 2002 fiscal quarter, with revenue increasing by 72% to $20.4
million and its strong performance continues to offset some of the weakness in
the traditional staffing business. Although the net sales of the A&I division
increased by 15% to $129.0 million for the third quarter from the comparable
quarter of the previous year, the division sustained an operating loss of $2.0
million in the current year's quarter, comparable to the $1.9 million loss in
last year's third quarter. The net sales of the Technical Placement division
increased by 10% to $219.4 million for the third quarter from the comparable
quarter of the previous year while operating profits decreased to $7.1 million
from $8.0 million in last year third quarter.
COMPUTER SYSTEMS
The segment reported an operating profit of $3.6 million for the third
quarter, an increase of 40% compared to the $2.6 million for the comparable
quarter of the previous year. Both domestic and European operations contributed
strong performances. Sales for the fiscal 2003 third quarter were $23.5 million,
a 26% increase over the $18.6 million in the comparable quarter of the previous
year. ASP transactions continue sequential growth, increasing by 20% over the
second quarter of fiscal 2003, both because of increased usage by existing
customers and acquisition of new accounts. The improved results also reflect the
acceptance of additional operator services infrastructure by a major customer.
TELEPHONE DIRECTORY
This segment reported a third quarter operating profit of $4.1 million on
$22.3 million in sales compared to a $3.4 million operating profit on $19.8
million in sales for the comparable quarter of the previous year. Included in
the quarter's results was revenue of $0.8 million from a customer for the
cancellation of a directory production contract, previously announced, whose
terms included a monthly fee to be paid through November 2003. Advertising sales
for the community directory division remain strong and bad debt write-offs under
its installment sales program have been reduced, indicating continued strong
profitability for that division.
TELECOMMUNICATIONS SERVICES
The segment reported an operating loss of $0.9 million for the third
quarter of fiscal 2003 on sales of $24.7 million compared to an operating loss
of $3.3 million on sales of $24.3 million for the comparable quarter of the
previous year. Despite relatively flat sales, the segment was able to reduce its
loss by 73% due to the profitable performance of its Central Office and Business
Services operations and the continued reduction of losses in the Construction
and Engineering division resulting from reduced overhead and improved
efficiencies achieved through the segment's restructuring.
GENERAL AND ADMINISTRATIVE EXPENSES
General corporate expenses increased over the prior year's nine-month and
third quarter periods, primarily due to previously reported costs to meet
disaster recovery requirements, including redundancy and business continuity for
the Company's corporate systems and communications network.
LIQUIDITY
Cash and cash equivalents, excluding restricted cash, increased to $37.8
million at August 3, 2003 from $32.2 million at November 3, 2002. At August 3,
2003, the Company had sold a continuing participation interest in accounts
receivable of $70.0 million under its securitization program and currently has
the ability to finance up to an additional $30.0 million under that facility. To
date, the Company has not borrowed under its $40.0 million secured revolving
credit facility.
Volt Information Sciences, Inc. is a leading national provider of Staffing
Services and Telecommunications and Information Solutions for its Fortune 100
customer base. Operating through a network of over 300 Volt Services Group
branch offices, the Staffing Services segment fulfills IT and other technical,
commercial and industrial placement requirements of its customers, on both a
temporary and permanent basis. The Telecommunications and Information Solutions
businesses provide complete telephone directory production and directory
publishing; a full spectrum of telecommunications construction, installation and
engineering services; and advanced information and operator services systems for
telephone companies. For additional information, please visit the Volt
Information Sciences, Inc., web site at http://www.volt.com.
This press release contains forward-looking statements which are subject to
a number of known and unknown risks, including general economic, competitive and
other business conditions, the degree and timing of customer utilization and the
rate of renewals of contracts with the Company, 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 is 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 and the New York Stock Exchange, are
available without charge upon request to Volt Information Sciences, Inc., 560
Lexington Avenue, New York, New York 10022, 212-704-2400, 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 Information section.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS
(UNAUDITED)
THIRD QUARTER NINE MONTHS
ENDED ENDED
August 3, August 4, August 3, August 4,
2003 2002 (1) 2003 2002 (1,2)
----------- ----------- ----------- -----------
(In thousands, except per share amounts)
Net sales $415,158 $371,849 $1,171,099 $1,068,219
=========== =========== =========== ===========
Income (loss) from
continuing operations
before income taxes $3,334 $2,011 ($3,386) ($16,138)
Income tax (provision)
benefit (1,223) (878) 1,262 6,137
----------- ----------- ----------- -----------
Income (loss) from
continuing operations 2,111 1,133 (2,124) (10,001)
Discontinued
operations-Note A 4,310
Cumulative effect of a
change in accounting-
Note B:
Goodwill impairment - - - (31,927)
----------- ----------- ----------- -----------
Net income (loss) $2,111 $1,133 ($2,124) ($37,618)
=========== =========== =========== ===========
Per Share Data
Basic and Diluted:
Income (loss) from
continuing
operations $0.14 $0.07 ($0.14) ($0.65)
Discontinued
operations 0.28
Cumulative effect
of a change in
accounting - - - (2.10)
----------- ----------- ----------- -----------
Net income (loss) $0.14 $0.07 ($0.14) ($2.47)
=========== =========== =========== ===========
Weighted average
number of shares
outstanding-basic 15,218 15,217 15,217 15,216
=========== =========== =========== ===========
Weighted average
number of shares
outstanding-diluted 15,226 15,280 15,217 15,216
=========== =========== =========== ===========
(1) As previously announced, the Company has changed the method of
reporting the revenues of its Professional Employee Organization
("PEO") subsidiary from gross billing to a net revenue basis.
Accordingly, reported PEO revenues and related cost of sales for
the nine and three months ended August 4, 2002 have been reduced
by $14.6 million and $4.8 million, respectively, with no effect on
operating profit or the net results of the Company.
(2) Pursuant to the Company's adoption of SFAS No. 145, results for
the nine months ended August 4, 2002 have been restated to give
effect of the reclassification of a charge of $2.1 million ($1.3
million, net of taxes) arising from a March 2002 early payment of
the Company's $30 million 7.92% Senior Notes to Other Expense,
previously presented as an extraordinary item.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
August 3, November 3,
2003 2002
----------- -----------
(Unaudited)
ASSETS (In thousands)
CURRENT ASSETS
Cash and cash equivalents, including
restricted cash of $20,606 (2003) and
$11,458 (2002)-Note C $58,418 $43,620
Short-term investments 3,947 3,754
Trade receivables, net-Note D 298,565 300,670
Inventories 32,840 29,690
Recoverable income taxes 8,043 6,552
Deferred income taxes 8,866 8,343
Prepaid expenses and other assets 16,369 15,212
----------- -----------
TOTAL CURRENT ASSETS 427,048 407,841
Property, plant and equipment, net 84,757 89,294
Deposits and other assets 2,523 3,380
Intangible assets, net-Note B 8,983 9,075
----------- -----------
TOTAL ASSETS $523,311 $509,590
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to banks $3,373 $2,424
Current portion of long-term debt 363 1,524
Accounts payable 153,640 154,054
Accrued wages and commissions 42,687 39,529
Accrued taxes other than income taxes 15,372 18,525
Accrued interest and other accruals 14,720 8,276
Customer advances and other liabilities 30,026 19,009
----------- -----------
TOTAL CURRENT LIABILITIES 260,181 243,341
Long-term debt 14,193 14,469
Deferred income taxes 13,775 14,743
Stockholders' Equity 235,162 237,037
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $523,311 $509,590
=========== ===========
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
THIRD QUARTER NINE MONTHS
ENDED ENDED
August 3, August 4, August 3, August 4,
2003 2002 (1) 2003 2002 (1,2)
----------- ----------- ----------- -----------
(Dollars in thousands)
Net Sales
- ----------------------
Staffing Services-
Note C
Traditional staffing $327,638 $292,062 $926,849 $835,069
Managed services 266,584 214,352 767,437 488,273
----------- ----------- ----------- -----------
Total gross sales 594,222 506,414 1,694,286 1,323,342
Less non-recourse
managed services (245,774) (194,301) (709,803) (438,729)
----------- ----------- ----------- -----------
Net Staffing
Services sales 348,448 312,113 984,483 884,613
Telephone Directory 22,319 19,763 49,743 50,866
Telecommunications
Services 24,736 24,307 80,226 84,910
Computer Systems 23,488 18,604 65,559 58,289
Elimination of
intersegment sales (3,833) (2,938) (8,912) (10,459)
----------- ----------- ----------- -----------
Total Net Sales $415,158 $371,849 $1,171,099 $1,068,219
=========== =========== =========== ===========
Income (Loss) from
Continuing Operations
before Income Taxes:
- ----------------------
Segment Operating
Profit (Loss)
- ----------------------
Staffing Services $5,043 $6,130 $8,577 $9,275
Telephone Directory 4,128 3,381 4,584 2,505
Telecommunications
Services (894) (3,282) (1,947) (11,316)
Computer Systems 3,584 2,563 9,158 6,528
----------- ----------- ----------- -----------
Total Segment
Operating Profit 11,861 8,792 20,372 6,992
General corporate
expenses (7,051) (5,392) (20,003) (16,849)
----------- ----------- ----------- -----------
Total Operating Profit
(Loss) 4,810 3,400 369 (9,857)
Interest income and
other expense (812) (356) (1,803) (2,146)
Foreign exchange loss,
net (184) (255) (274) (316)
Interest expense (480) (778) (1,678) (3,819)
----------- ----------- ----------- -----------
Income (Loss) from
Continuing Operations
before Income Taxes $3,334 $2,011 ($3,386) ($16,138)
=========== =========== =========== ===========
(1) As previously announced, the Company has changed the method of
reporting the revenues of its Professional Employee Organization
("PEO") subsidiary, of the Staffing Services segment, from gross
billing to a net revenue basis. Accordingly, reported PEO revenues
and related cost of sales for the nine and three months ended
August 4, 2002 have been reduced by $14.6 million and $4.8
million, respectively, with no effect on operating profit or the
net results of the Company.
(2) Pursuant to the Company's adoption of SFAS No. 145, results for
the nine months ended August 4, 2002 have been restated to give
effect of the reclassification of a charge of $2.1 million ($1.3
million, net of taxes) arising from a March 2002 early payment of
the Company's $30 million 7.92% Senior Notes to Other Expense,
previously presented as an extraordinary item.
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
Note A - The results of discontinued operations reflect the Company's
percentage interest in the loss through November 30, 2001 of, and
the Company's gain on the sale on that date of its interest in,
its 59% owned publicly-held subsidiary, Autologic Information
International, Inc. ("Autologic"), that comprised the Company's
Electronic Publication and Typesetting segment. Autologic was
acquired by Agfa Corporation through a tender offer for all of
Autologic's outstanding shares and a subsequent merger. The
Company received $24.2 million for its shares. The gain on the
sale of $4.5 million, including a tax benefit of $1.7 million, was
reflected in the Company's first quarter of fiscal 2002. The
results of Autologic are classified as discontinued operations.
B - As of the beginning of fiscal year 2002, the Company adopted
Statement of Financial Accounting Standards ("SFAS") No. 142,
"Goodwill and Other Intangible Assets." Under the new rules,
beginning in fiscal 2002, goodwill and other intangibles with
indefinite lives are no longer amortized, but are subject to
testing, annually and whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable, using
fair value methodology. The results of testing goodwill, upon the
adoption of SFAS No. 142, resulted in a non-cash charge to
earnings for goodwill impairment of $31.9 million as of November
5, 2001, which is presented as a Cumulative Effect of a Change in
Accounting. The charge consisted of a write-down of goodwill of
$23.9 million in the Staffing Services segment, primarily related
to the goodwill of the IT staffing sector in Europe, and $8.0
million related to community directory acquisitions in the
Telephone Directory segment and a joint venture.
C - Under certain contracts with customers, the Company manages the
customers' alternative staffing requirements, including
transactions between the customer and other staffing vendors
("associate vendors"). When payments to associate vendors are
subject to the receipt of the customers' payment to the Company,
the arrangements are considered non-recourse against the Company
and revenue, other than management fees to the Company, is
excluded from sales. Cash restricted to cover such obligations is
included in cash and cash equivalents on the August 3, 2003 and
November 3, 2002 balance sheets.
D - On April 15, 2002, under a new securitization program, the
Company, through a 100%-owned consolidated special purpose
subsidiary, sold a participation interest of $50.0 million out of
an initial pool approximating $162.0 million of receivables to an
unaffiliated third party. The outstanding balance of the
participation interest sold was $70.0 million at August 3, 2003
and $60.0 million at November 3, 2002. Accordingly, the trade
receivables included on the August 3, 2003 and November 3, 2002
balance sheets have been reduced to reflect the $70.0 million and
$60.0 million participation interest sold, respectively.
CONTACT: Volt Information Sciences, Inc.
James J. Groberg and Ron Kochman
212-704-2400
voltinvest@volt.com