Exhibit 99.1
Volt Information Sciences Reports Increased Third Quarter Earnings
NEW YORK--(BUSINESS WIRE)--Sept. 14, 2004--Volt Information
Sciences, Inc. (NYSE:VOL) today reported financial results for the
Company's third quarter and nine months ended August 1, 2004.
Volt 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 1-800-857-0373 (domestic) or 1-773-756-4602 (international),
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.
The following is a summary of the Company's results of operations
and the notes thereto. The notes are an integral part of the summary.
THIRD QUARTER - FISCAL 2004 RESULTS
For the third quarter ended August 1, 2004, the Company reported
net income of $9.2 million, or $0.60 per share, on net sales of $500.7
million, compared to net income of $2.1 million, or $0.14 per share,
for the comparable quarter of the previous year, on net sales of
$415.2 million.
NINE MONTHS - FISCAL 2004 RESULTS
For the first nine months of fiscal 2004, the Company reported a
net income of $21.5 million, or $1.40 per share, on net sales of $1.4
billion, compared to a net loss of $2.1 million, or $0.14 per share,
on net sales of $1.2 billion last year, for the comparable nine months
of the previous year.
The Company reported income from continuing operations of $12.0
million, or $0.78 per share, in the nine months ended August 1, 2004
compared to a loss from continuing operations of $2.1 million, or
$0.14 per share in the comparable fiscal 2003 period. The results of
the first nine months of fiscal 2004 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.
"This has been an exciting quarter for Volt," commented William
Shaw, President and Chairman of the Company. "The extremely strong
performance, both in increased sales and operating profit, as well as
the acquisition of Nortel's directory and operator services business
for our Computer Systems segment, is a continuation of the material
improvement and momentum of the Company's operations during the entire
year," stated Mr. Shaw. "Three of our four segments contributed to the
twenty-one percent increase in sales and the two hundred and
forty-seven percent increase in operating profit compared with the
2003 third quarter." "I am particularly pleased", continued Mr. Shaw,
"that our operating profit growth rate throughout the year has
significantly exceeded the growth in sales."
STAFFING SERVICES
Both the Technical Placement division and the Administrative and
Industrial division of this segment contributed to the 20% increase in
sales and 131% increase in the segment's operating profit on a
comparable quarter basis. The Administrative and Industrial division
returned to profitability, with a six-hundred thousand dollar
operating profit compared to a two million dollar loss in the
comparable fiscal 2003 quarter. This improvement resulted from both a
31% increase in sales and a 0.9 percentage point increase in gross
margin. Gains were shown both in temporary and permanent placement
business of the division. The increase in gross margin occurred even
though payroll taxes have increased, as previously noted.
The Technical Placement division's increase from the prior year's
third quarter in operating profit of 56% also resulted from both an
increase in sales, both in traditional placement and in the project
management and consulting business, and an increase in gross margins
of 23%. Sales for this division increased by 15% compared to the 2003
third quarter.
COMPUTER SYSTEMS
Improvements in this segment's operator service business, a growth
in DataServ's directory service business with non-telco companies, an
increase in sales in the Maintech division and an increase in product
revenue of 22% resulted in a 154% increase in operating profit from
the 2003 comparable quarter. In addition, there was an increase in
gross margins of 10.7 percentage points and a 4.4 percentage points
decrease in overhead as a percentage of sales. Of the $5.5 million
increase in operating profit, $1.2 million resulted from the
settlement of a vendor dispute and vendor refunds related to prior
periods.
As previously noted in a press release of August 2, Volt Delta
Resources LLC, the principal business unit of this segment, acquired
certain assets and liabilities of the directory and operator services
business of Nortel Networks on August 2. This acquisition will permit
Volt Delta to provide the newly combined customer base with new
solutions, and an expanded suite of products, content and enhanced
services.
TELEPHONE DIRECTORY
Operating profit for this segment decreased by $1.5 million
compared to the 2003 comparable quarter, primarily the result of a
$1.5 million sales decline in the segment's Telephone Directory
Production division, due to a previously reported loss of a major
contract, and a $1.6 million decline in revenue from the segment's
Uruguayan operations. The operating loss of these two divisions was
partially offset by a $1.4 million increase in the operating profit of
DataNational, the publisher of community directories.
TELECOMMUNICATIONS SERVICES
A strong performance by the Business Systems and Construction and
Engineering divisions of this segment more than offset continued
losses in the Central Office division and returned the segment to
profitability for the quarter. Sales increased 50% and overhead was
reduced to 20% of sales. This produced an operating profit of $1.0
million for the quarter. However, the depressed condition of the
telecommunications industry continues to reduce available work and
puts extreme pressure on gross margins, which declined in the quarter
compared to last year.
GENERAL CORPORATE EXPENSES
General corporate expenses increased by $0.7 million compared with
the third quarter of 2003, primarily the result of increased spending
for professional fees and corporate systems.
LIQUIDITY
Cash and cash equivalents, excluding restricted cash, decreased to
$34.3 million at August 1, 2004 from $43.2 million at November 2,
2003. At August 1, 2004, the Company had sold a continuing
participating interest in accounts receivable of $60.0 million under
its securitization program, an increase of $10.0 million from the end
of the second quarter, and had the ability to finance up to an
additional $90.0 million under the facility.
The Company may also borrow under its $30.0 million revolving
secured credit facility, which is limited by a specific borrowing
base. At the end of the third quarter, $26.6 million was available
under the borrowing base. The Company had borrowed 2.0 million British
pounds ($3.6 million) at August 1, 2004 under the $30.0 million
revolving secured 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,
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
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.
(Tables Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS
(UNAUDITED)
THIRD QUARTER NINE MONTHS
ENDED ENDED
August 1, August 3, August 1, August 3,
2004 2003 2004 2003
----------------------------------------
(In thousands, except per share amounts)
Net sales $500,732 $415,158 $1,390,655 $1,171,099
========================================
Income (loss) from continuing
operations before income
taxes $15,292 $3,334 $19,733 ($3,386)
Income tax (provision) benefit (6,053) (1,223) (7,764) 1,262
----------------------------------------
Income (loss) from continuing
operations 9,239 2,111 11,969 (2,124)
Discontinued operations-Note A - - 9,520 -
----------------------------------------
Net income (loss) $9,239 $2,111 $21,489 ($2,124)
========================================
Per Share Data
Basic:
Income (loss) from
continuing operations $0.61 $0.14 $0.79 ($0.14)
Discontinued operations - - 0.62 -
----------------------------------------
Net income (loss) $0.61 $0.14 $1.41 ($0.14)
========================================
Weighted average number of
shares outstanding 15,233 15,218 15,226 15,217
========================================
Diluted:
Income (loss) from
continuing operations $0.60 $0.14 $0.78 ($0.14)
Discontinued operations - - 0.62 -
----------------------------------------
Net income (loss) $0.60 $0.14 $1.40 ($0.14)
========================================
Weighted average number of
shares outstanding 15,399 15,226 15,342 15,217
========================================
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
August 1, November 2,
2004 2003
-----------------------------
(Unaudited)
Assets (In thousands)
Current Assets
Cash and cash equivalents, including
restricted cash of $34,472 (2004) and
$18,870 (2003)-Note B $68,736 $62,057
Short-term investments 4,187 4,149
Trade receivables, net-Note B 378,368 313,946
Inventories 31,904 37,357
Recoverable income taxes - 2,596
Deferred income taxes 8,705 8,722
Prepaid and other assets 15,654 16,132
-----------------------------
Total Current Assets 507,554 444,959
Property, plant and equipment, net 83,400 82,452
Deposits and other assets 2,701 2,300
Intangible assets, net 9,355 8,982
-----------------------------
Total Assets $603,010 $538,693
=============================
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $7,717 $4,062
Current portion of long-term debt 394 371
Accounts payable 170,329 153,979
Accrued wages and commissions 49,731 45,834
Accrued taxes other than income taxes 17,859 16,741
Other accruals 23,938 14,673
Deferred income and other liabilities 35,122 27,665
Income taxes payable 5,424 -
-----------------------------
Total Current Liabilities 310,514 263,325
Accrued insurance 4,012 4,098
Long-term debt 13,799 14,098
Deferred income taxes 10,770 15,252
Stockholders' Equity 263,915 241,920
-----------------------------
Total Liabilities and
Stockholders' Equity $603,010 $538,693
=============================
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
THIRD QUARTER NINE MONTHS
ENDED ENDED
August 1, August 3, August 1, August 3,
2004 2003 2004 2003
----------------------------------------
(Dollars in thousands)
Net Sales
- ------------------------------
Staffing Services-Note C
Staffing $410,112 $327,638 $1,150,026 $926,849
Managed services 306,054 266,584 835,850 767,437
----------------------------------------
Total gross sales 716,166 594,222 1,985,876 1,694,286
Less non-recourse managed
services (298,354)(245,774) (814,770) (709,803)
----------------------------------------
Net Staffing Services 417,812 348,448 1,171,106 984,483
Telephone Directory 19,436 22,319 49,603 49,743
Telecommunications Services 37,041 24,736 100,445 80,226
Computer Systems 30,128 23,488 80,550 65,559
Elimination of intersegment
sales (3,685) (3,833) (11,049) (8,912)
----------------------------------------
Total Net Sales $500,732 $415,158 $1,390,655 $1,171,099
========================================
Income (Loss) from Continuing
Operations before Income
Taxes:
- ------------------------------
Segment Operating Profit
- ------------------------------
Staffing Services $11,642 $5,043 $22,600 $8,577
Telephone Directory 2,621 4,128 6,006 4,584
Telecommunications Services 1,064 (894) (1,655) (1,947)
Computer Systems 9,090 3,584 19,479 9,158
----------------------------------------
Total Segment Operating Profit 24,417 11,861 46,430 20,372
General corporate expenses (7,704) (7,051) (22,897) (20,003)
----------------------------------------
Total Operating Profit 16,713 4,810 23,533 369
Interest income and other
expense (952) (812) (2,381) (1,803)
Foreign exchange loss, net (28) (184) (98) (274)
Interest expense (441) (480) (1,321) (1,678)
----------------------------------------
Income (Loss) from Continuing
Operations before Income
Taxes $15,292 $3,334 $19,733 ($3,386)
========================================
(Notes Follow)
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 August 1, 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 $60.0 million
out of pool approximating $229.5 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
August 1, 2004 and November 2, 2003 balance sheets have been
reduced to reflect the $60.0 million and $70.0 million
participation interest sold, respectively.
CONTACT: Volt Information Sciences, Inc.
James J. Groberg and Ron Kochman
212-704-2400
voltinvest@volt.com