Exhibit 99.1
Volt Information Sciences Announces First Quarter Results
NEW YORK--(BUSINESS WIRE)--March 9, 2004--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's first quarter ended February 1, 2004.
Volt will conduct a conference call webcast at 11:00 A.M. (EST)
today to discuss first quarter results. The conference call dial-in
number is 1-800-857-9600, passcode: First 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.
For the first quarter of fiscal 2004, ended February 1, 2004, the
Company reported a net loss of $1.5 million, or $0.10 per share,
compared to a net loss of $3.8 million, or $0.25 per share in the
fiscal 2003 first quarter. Net sales increased by 17% to $412.7
million, compared to $352.5 million in last year's comparable quarter.
Attached is a summary of the Company's results of operations and
notes thereto. The notes are an integral part of the summary.
Commenting on the results, Mr. William Shaw, Chairman and
President of Volt, stated: "The continued improvement in both sales
and operating profit in three of our four business segments, when
compared to the fiscal 2003 first quarter, appears to confirm both our
strategy for growth and increased profitability, and an improved
economy. The effect on Staffing Services business during the difficult
holiday season and the continued lack of capital expenditures by the
telecommunications industry resulted in a repetition of the Company's
historical pattern of first quarter losses. However, I believe the
improved results will carry over to the next three quarters of the
year. It should also be noted that included in the operating loss is a
previously reported non-recurring charge of $1.3 million related to a
domestic consulting contract."
STAFFING SERVICES
Sales for this segment increased by $51.2 million, or 17%,
compared with the 2003 first quarter. The sales increase came from
traditional staffing in both the Technical Placement and
Administrative and Industrial divisions, as well as from higher margin
project management business. The segment produced an operating profit
of $1.4 million compared to a loss of $1.3 million in the fiscal 2003
first quarter. The improved results were primarily the result of
increased profits in the Technical Placement division including the
project management business. Business remains highly competitive in
this segment, while increases in state taxes and worker's compensation
costs continue to put pressure on margins. On the more positive side,
there are strong indications that the U.S. industrial base has begun
to accelerate its use of temporary staffing.
COMPUTER SYSTEMS
The growth of both revenue and operating profit continued into the
first quarter. Sales increased 18% over the 2003 first quarter and
gross margin increased by 7.2 percentage points. This combination
resulted in an 89% increase in operating profit to $4.5 million for
the quarter, compared to $2.4 million in the 2003 first quarter. An
increase in sales was reported by all divisions within the segment,
and the ASP directory assistance outsourcing business reflected a 10%
sequential increase in transactions billed from the fourth quarter of
2003.
TELECOMMUNICATIONS SERVICES
Although sales for this segment increased by $4.0 million compared
to the fiscal 2003 first quarter, a decrease in gross margins
resulting from the change in the mix of business, as well as the $1.3
million non-recurring expense noted above, increased the operating
loss for the quarter to $1.9 million from a loss of $0.2 million in
2003. Spending by telephone companies for central office work declined
materially, which resulted in an operating loss in that division of
$1.2 million compared with an operating profit of $0.2 million in last
year's first quarter. A significant headcount reduction in that
division in mid-January should improve the results in future quarters.
TELEPHONE DIRECTORY
The increase in operating profit for this segment, as well as the
17% increase in sales from last year's first quarter, resulted from
the increase in directories published, as well as the increase in
gross margin for the DataNational division. The operating profit for
this division was $1.8 million, compared to a loss of $0.4 million in
the 2003 first quarter. The ad sales backlog has improved and should
provide increased sales over the next three quarters. Operating profit
for the directory production division decreased by $0.3 million from
the 2003 first quarter as a result of a previously reported loss of a
contract during the third quarter of 2003.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased over the comparable
first quarter of 2003 primarily due to costs related to 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
$50.7 million at February 1, 2004 from $43.2 million at November 2,
2003. At February 1, 2004, the Company had sold a continuing
participating interest in accounts receivable of $65.0 million under
its securitization program and had the ability to finance up to an
additional $35.0 million under the facility. The Company is presently
negotiating an increase in the securitization facility to $150.0
million in anticipation of the potential of increased revenue, as well
as an extension of the term.
In addition, the Company may borrow under a $40.0 million
revolving credit facility, under which borrowings are limited by a
specific borrowing base ($37.9 million available on February 1, 2004).
This revolver expires in April 2004. Subsequent to February 1, 2004
the Company borrowed three million British pounds ($5.4 million) under
this facility.
Volt Information Sciences, Inc. is a leading national provider of
Staffing Services and Telecommunications and Information Solutions
with a 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,
which includes the Telecommunications Services, Computer Systems and
Telephone Directory segments, 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's 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 OPERATIONS
(UNAUDITED)
FIRST QUARTER ENDED
February February
1, 2004 2, 2003(1)
--------- ----------
(In thousands, except
per share amounts)
Net sales $412,681 $352,535
======== ========
Loss before income taxes ($2,512) ($6,092)
Income tax benefit 991 2,289
-------- --------
Net loss ($1,521) ($3,803)
======== ========
Per Share Data
Basic and Diluted:
Net loss per share ($0.10) ($0.25)
======== ========
Weighted average number of shares outstanding 15,222 15,217
======== ========
(1) As previously announced, the Company has changed the method of
reporting the revenues of its Professional Employer Organization
("PEO") subsidiary from gross billing to a net revenue basis.
Accordingly, reported PEO revenues and related cost of sales for the
three months ended February 2, 2003 have been reduced by $5.7 million,
with no effect on operating profit or the net results of the Company.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FIRST QUARTER ENDED
February February
1, 2004 2, 2003(1)
--------- ---------
(Dollars in thousands)
Net Sales
- ---------
Staffing Services-Note A
Traditional staffing $ 342,676 $ 281,586
Managed services 238,098 235,935
--------- ---------
Total gross sales 580,774 517,521
Less non-recourse managed services (233,133) (221,045)
--------- ---------
Net Staffing Services sales 347,641 296,476
Telephone Directory 14,571 12,471
Telecommunications Services 29,896 25,857
Computer Systems 24,095 20,374
Elimination of intersegment sales (3,522) (2,643)
--------- ---------
Total Net Sales $ 412,681 $ 352,535
========= =========
Loss from Continuing Operations before Income
Taxes:
- ----------------------------------------------
Staffing Services $ 1,391 ($1,346)
Telephone Directory 1,985 (202)
Telecommunications Services (1,902) (163)
Computer Systems 4,523 2,392
--------- ---------
Total segment operating profit 5,997 681
Interest income and other (expense) income,
net (516) (374)
General corporate expenses (7,560) (5,841)
Interest expense (457) (643)
Foreign exchange gain, net 24 85
--------- ---------
Loss before Income Taxes ($2,512) ($6,092)
========= =========
(1) As previously announced, the Company has changed the method of
reporting the revenues of its Professional Employer Organization
("PEO") subsidiary from gross billing to a net revenue basis.
Accordingly, reported PEO revenues and related cost of sales for the
three months ended February 2, 2003 have been reduced by $5.7 million,
with no effect on operating profit or the net results of the Company.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
February 1, November 2,
2004 2003
------------------------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents, including
restricted cash of $19,580 (2004) and
$18,870 (2003)-Note A $ 70,241 $ 62,057
Short-term investments 4,155 4,149
Trade receivables, net-Note B 292,548 313,946
Inventories 34,777 37,357
Recoverable income taxes 4,116 2,596
Deferred income taxes 8,842 8,722
Prepaid and other assets 14,980 16,132
-------- --------
Total Current Assets 429,659 444,959
Property, plant and equipment, net 85,465 82,452
Deposits and other assets 2,020 2,300
Intangible assets, net 8,982 8,982
-------- --------
Total Assets $526,126 $538,693
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $ 4,252 $ 4,062
Current portion of long-term debt 378 371
Accounts payable 137,264 153,979
Accrued wages and commissions 42,894 45,834
Accrued taxes other than income taxes 20,935 16,741
Other accruals 15,308 14,673
Customer advances and other liabilities 31,054 27,665
-------- --------
Total Current Liabilities 252,085 263,325
Accrued insurance 4,098 4,098
Long-term debt 14,001 14,098
Deferred income taxes 15,475 15,252
Stockholders' Equity 240,467 241,920
-------- --------
Total Liabilities and Stockholders' Equity $526,126 $538,693
======== ========
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
A - 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 February 1, 2004 and November 3, 2002
balance sheets.
B- On April 15, 2002, under a 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
$65.0 million at February 1, 2004 and $70.0 million at November 2,
2003. Accordingly, the trade receivables included on the February 1,
2004 and November 2, 2003 balance sheets have been reduced to reflect
the $65.0 million and $70.0 million participation interest sold,
respectively.
CONTACT: Volt Information Sciences, Inc.
James J. Groberg / Ron Kochman, 212-704-2400
voltinvest@volt.com