Exhibit 99.1
Volt Information Sciences Announces Second Quarter Results
NEW YORK--(BUSINESS WIRE)--June 9, 2004--Volt Information
Sciences, Inc. (NYSE:VOL) today reported financial results for the
Company's second quarter and six months ended May 2, 2004.
Volt will conduct a conference call webcast at 11:00 A.M. (EDT)
today to discuss second quarter results. The conference call dial-in
number is 1-888-677-5721 (domestic) or 1-773-756-4633 (international),
passcode: Second 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.
Attached is a summary of the Company's results of operations and
the notes thereto. The notes are an integral part of the summary.
Second Quarter - Fiscal 2004 Results
For the second quarter of fiscal 2004 ended May 2, 2004, the
Company reported net income of $13.8 million, or $0.90 per share,
compared to a net loss of $0.4 million, or $0.03 per share, in the
fiscal 2003 second quarter. Net sales increased by 18% to $477.2
million, compared to $403.4 million in last year's comparable quarter.
The results of the 2004 second quarter included income from
discontinued operations, net of taxes, of $9.5 million, or $0.62 per
share, from the sale of real estate previously leased to the Company's
formerly 59% owned subsidiary, Autologic Information International,
Inc. The Company's interest in the subsidiary was sold in November
2001.
The Company reported income from continuing operations of $4.3
million, or $0.28 per share, in the second quarter of 2004 compared to
a loss from continuing operations of $0.4 million, or $0.03 per share,
in the comparable fiscal 2003 quarter.
Six Months - Fiscal 2004 Results
For the first six-months of fiscal 2004, the Company reported net
income, including the income from discontinued operations of $9.5
million in the second quarter, of $12.3 million, or $0.80 per share,
on net sales of $889.9 million, compared to a net loss of $4.2
million, or $0.28 per share, on net sales of $755.9 million last year.
The Company reported income from continuing operations of $2.7
million, or $0.18 per share, in the six months ended May 2, 2004,
compared to a loss from continuing operations of $4.2 million, or
$0.28 per share, in the comparable fiscal 2003 period.
"The increase in revenue in each of our segments over the prior
year's comparable quarter, as well the improvement in operating
results, continue the trends seen in the first quarter. The
combination of aggressive marketing, which has increased market share,
the improvement of the economy and the continued concentration on
control of overhead makes me optimistic regarding the second half of
the fiscal year," commented William Shaw, Chairman and President of
the Company. "Of particular significance," stated Mr. Shaw, "are the
sustained increases in both sales and operating results of our two
higher margin segments, Computer Systems and Telephone Directory. We
are also extremely pleased by the doubling of operating profit and
increase in bottom line margin percentages in the Staffing Services
segment." Also of note, as explained below, during the quarter we
completed an agreement to extend and increase our securitization
financing through April, 2006. This increase in financing availability
should easily meet working capital requirements for the next two
years. In addition, we completed the extension of our revolving credit
agreement through April 2005."
Staffing Services
Sales for this segment increased by 19% and operating profit
increased by 96% compared with the 2003 second fiscal quarter, both
divisions of this segment show improved results over the comparable
fiscal 2003 quarter. The Technical Placement division increased
operating profit by 39% and sales by 14%, while the Administrative and
Industrial division, which continues to be burdened by increased
unemployment and other local taxes, as well as intense competition,
reduced its operating loss by 59% with a sales increase of 28%. The
increased revenue of these divisions results from both the economic
recovery of many of the divisions' existing customers as well as the
addition of new customers. A decrease of overhead as a percentage of
sales also contributed to the improved results. Of particular note is
the continued growth of the VMC project management and consulting unit
of the Technical Placement division, with double digit percentage
increases in sales over both the second fiscal quarter of 2003 and the
first quarter of this fiscal year.
Computer Systems
Increased gross margins and higher sales, resulting primarily from
the growth of the segment's ASP directory assistance business,
produced an operating profit of $5.9 million in the second fiscal
quarter, compared with $3.2 million in the comparable quarter of 2003.
The operator service business, including ASP revenue, reflected a 42%
growth over the comparable 2003 quarter, and increased usage by
existing customers as well as the addition of new business in the
second half of the year should provide continued growth. Also
contributing to the quarter's results was the 74% growth in operating
profit of Maintech, the segment's IT services division, to slightly
over $1.0 million. Operating profit margin for the segment increased
to 22%, compared with 15% in second quarter of 2003. This increase in
margins is the result of increases in ASP revenue not being matched by
increased direct costs or overhead for that business.
Telephone Directory
A change in the publishing schedule, as well as an increase in
sales for certain community directories, published by DataNational,
were the primary reasons for the increase in sales. The segment's
operating profit doubled compared to last year's comparable quarter as
a result of the slight increase in sales and a 15% reduction in
overhead primarily due to lower bad debt write offs. While
DataNational's sales increased to $9.9 million from $7.6 million in
last year's second quarter, and operating profit increased by $1.4
million, these increases were partially offset by a decline in sales
of $1.6 million and profit of $0.7 million in the other three
divisions of the segment.
Telecommunication Services
Although sales for this segment increased by $3.9 million compared
to second quarter 2003 sales of $29.6 million, a decrease in gross
margins of 4.7 percentage points resulted in only a slight decrease in
the operating loss of the segment. The Business Systems division of
the segment was the one bright spot, with revenue increasing to $15.4
million in this year's second quarter from $7.6 million in the second
quarter of fiscal 2003 and $13.2 million in this year's first quarter,
operating profit for the division was $1.7 million, compared to $0.1
million in the 2003 second quarter and $1.2 million in the 2004 first
quarter. The other three divisions of the segment continued to show
operating losses and a decline in sales, particularly in the
Construction and Central Office divisions. Industry problems continue
to result in lower capital spending and a margin squeeze.
General Corporate Expenses
General corporate expenses increased by $0.5 million, or 7.3%,
over last year's second quarter, primarily as a result of increased
spending for professional fees and corporate systems.
Liquidity
Cash and cash equivalents, excluding restricted cash, decreased to
$38.0 million at May 2, 2004 from $43.2 million at November 2, 2003.
As previously announced the Company has increased the capacity of its
accounts receivable securitization facility to $150.0 million in
anticipation of the potential of increased revenue and extended the
term of the program by one year to April 2006. At May 2, 2004, the
Company had sold a continuing participating interest in accounts
receivable of $50.0 million under its securitization program, a
reduction of $15.0 million from the end of the first quarter, and had
the ability to finance up to an additional $100.0 million under the
facility.
In addition, the Company may borrow under a new $30.0 million
revolving secured credit facility, under which borrowings are limited
by a specific borrowing base (the entire $30.0 million was available
on May 2, 2004). This revolver expires in April 2005. Subsequent to
May 2, 2004, the Company borrowed two million British pounds ($3.6
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.
- -0-
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
SECOND QUARTER ENDED SIX MONTHS ENDED
May 2, May 4, May 2, May 4,
2004 2003 2004 2003
--------- --------- --------- ----------
(Dollars in thousands, except per share data)
Net sales $477,242 $403,406 $889,923 $755,941
========= ========= ========= ==========
Income (loss) from
continuing operations
before income taxes $6,953 ($628) $4,441 ($6,720)
Income tax (provision)
benefit (2,702) 196 (1,711) 2,485
--------- --------- --------- ----------
Income (loss) from
continuing operations 4,251 (432) 2,730 (4,235)
Discontinued
operations -sale of
real estate --Note A 9,520 - 9,520 -
--------- --------- --------- ----------
Net income (loss) $13,771 ($432) $12,250 ($4,235)
========= ========= ========= ==========
Per Share Data
Basic and Diluted:
Income (loss) from
continuing
operations
per share $0.28 ($0.03) $0.18 ($0.28)
Discontinued
operations
-sale of real
estate per
share 0.62 - 0.62 -
--------- --------- --------- ----------
Net income (loss)
per share $0.90 ($0.03) $0.80 ($0.28)
========= ========= ========= ==========
Weighted average
number of shares
outstanding - basic 15,223,545 15,217,415 15,222,586 15,217,415
========== ========== ========== ==========
Weighted average
number of shares
outstanding -
diluted 15,335,804 15,217,415 15,313,164 15,217,415
========== ========== ========== ==========
- -0-
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
May 2, November 2,
2004 2003
----------- -----------
(Unaudited)
Assets (In thousands)
Current Assets
Cash and cash equivalents, including
restricted cash of $24,937 (2004)
and $18,870 (2003)-Note B $62,919 $62,057
Short-term investments 4,206 4,149
Trade receivables, net-Note B 367,794 313,946
Inventories 31,937 37,357
Recoverable income taxes 2,596
Deferred income taxes 8,798 8,722
Prepaid and other assets 18,695 16,132
----------- -----------
Total Current Assets 494,349 444,959
Property, plant and equipment, net 82,663 82,452
Deposits and other assets 1,509 2,300
Intangible assets, net 8,982 8,982
----------- -----------
Total Assets $587,503 $538,693
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $3,997 $4,062
Current portion of long-term debt 386 371
Accounts payable 168,662 153,979
Accrued wages and commissions 48,038 45,834
Accrued taxes other than income taxes 19,097 16,741
Accrued interest and other accrued
expenses 23,826 14,673
Deferred income and other liabilities 33,929 27,665
Income taxes payable 2,266 -
----------- -----------
Total Current Liabilities 300,201 263,325
Accrued insurance 4,012 4,098
Long-term debt 13,901 14,098
Deferred income taxes 15,198 15,252
Stockholders' Equity 254,191 241,920
----------- -----------
Total Liabilities and
Stockholders' Equity $587,503 $538,693
=========== ===========
- -0-
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
Three Months Ended Six Months Ended
--------- --------- ---------- ----------
May 2, May 4, May 2, May 4,
2004 2003 2004 2003
--------- --------- ---------- ----------
Net Sales: (Dollars in thousands)
- ----------
Staffing Services--Note C
Traditional Staffing $397,238 $317,625 $739,914 $599,211
Managed Services 291,698 264,918 529,796 500,853
--------- --------- ---------- ----------
Total Gross Sales 688,936 582,543 1,269,710 1,100,064
Less: Non-Recourse
Managed Services (283,283) (242,984) (516,416) (464,029)
--------- --------- ---------- ----------
Net Staffing Services 405,653 339,559 753,294 636,035
Telephone Directory 15,596 14,953 30,167 27,424
Telecommunications Services 33,508 29,633 63,404 55,490
Computer Systems 26,327 21,697 50,422 42,071
Elimination of inter-
segment sales (3,842) (2,436) (7,364) (5,079)
--------- --------- ---------- ----------
Total Net Sales $477,242 $403,406 $889,923 $755,941
========= ========= ========== ==========
Income (Loss) from
Continuing Operations
Before Income Taxes
Staffing Services $9,567 $4,880 $10,958 $3,534
Telephone Directory 1,400 658 3,385 456
Telecommunications Services (817) (890) (2,719) (1,053)
Computer Systems 5,866 3,182 10,389 5,574
--------- --------- ---------- ----------
Total Segment Operating
Profit (Loss) 16,016 7,830 22,013 8,511
General corporate expenses (7,633) (7,111) (15,193) (12,952)
--------- --------- ---------- ----------
Total Operating Profit
(Loss) 8,383 719 6,820 (4,441)
Interest income and
other expense (913) (617) (1,429) (991)
Foreign exchange loss-net (94) (175) (70) (90)
Interest expense (423) (555) (880) (1,198)
--------- --------- ---------- ----------
Income (loss) from
Continuing Operations
Before Income Taxes $6,953 ($628) $4,441 ($6,720)
========= ========= ========== ==========
Note A- The results of discontinued operations reflect the sale of
real estate, in the second quarter of 2004, previously leased
by the Company to its former 59% owned subsidiary, Autologic
Information International, Inc., which interest was sold in
November 2001. The cash transaction resulted in a $9.5 million
gain, net of taxes of $4.6 million.
B- 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
May 2, 2004 and November 2, 2003 balance sheets.
C- Under an accounts receivable securitization program, the
Company, through a 100%-owned consolidated special purpose
subsidiary, sold a participation interest of $50.0 million out
of pool approximating $218.2 million of receivables to an
unaffiliated third party. The outstanding balance of the
participation interest sold at November 2, 2003 was $70.0
million. Accordingly, the trade receivables included on the
May 2, 2004 and November 2, 2003 balance sheets have been
reduced to reflect the $50.0 million and $70.0 million
participation interest sold, respectively.
In April 2004, the Company increased the maximum capacity of
the securitization program from $100.0 million to $150 million
and extended the terms of the program by one year to April
2006.
CONTACT: Volt Information Sciences, Inc.
James J. Groberg/Ron Kochman
212-704-2400
voltinvest@volt.com