Exhibit 99.1
Volt Information Sciences Announces First Quarter Results
NEW YORK--(BUSINESS WIRE)--March 8, 2005--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's first quarter ended January 30, 2005.
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 1-888-664-9852 (Domestic) or 1-517-319-9392 (International),
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.
FIRST QUARTER RESULTS
Attached is a summary of the Company's results of operations and
notes thereto. The notes are an integral part of the summary.
For the first quarter of fiscal 2005, ended January 30, 2005, the
Company reported a net loss of $0.8 million, or $0.05 per share,
compared to a loss of $1.2 million, or $0.08 per share in the fiscal
2004 first quarter. Net sales increased by 20% to $497.8 million,
compared to $414.0 million in last year's comparable quarter.
Income before minority interest and income taxes increased to $0.2
million in the quarter compared to a loss of $1.9 million in the
comparable fiscal 2004 quarter.
Commenting on the results, Mr. William Shaw, Chairman and
President of Volt, stated: "Although the Company experienced the
historical first quarter pattern of lowered results, due to the number
of holidays and customer closings during the Christmas/New Year
period, the twenty percent increase in sales compared to last year's
first quarter and the comparable increase in segment operating profits
of over three million dollars is a strong indication of our continued
improvement in both revenue and profitability. Of particular note, is
the successful integration of the Nortel DOS business and the
extremely strong contribution of the Computer Systems segment."
STAFFING SERVICES
Net sales for this segment increased by 21% to $420.3 million
compared to the fiscal 2004 first quarter, while operating profit
increased to $2.5 million from $1.4 million. All of this segment's
increase in profitability was due to improved results in traditional
technical staffing, which increased operating profit by $1.4 million
over the 2004 first quarter, offset by slightly lower results in the
Administrative and Industrial and project management businesses. Gross
margins in both the latter two divisions remain under pressure, with
the margins for both showing some decline.
COMPUTER SYSTEMS
Both the Maintech Division and Information Systems Division of
this segment produced strong growth in revenue and operating profit
compared to 2004 first quarter. Revenue for the Information Systems
Division more than doubled, while operating profit increased by 68%,
fueled by a $6.0 million growth in transaction revenue for operator
services and the additional revenue resulting from the acquisition of
the Nortel DOS business.
TELEPHONE DIRECTORY
The $0.5 million reduction in operating profit for this segment
compared to the fiscal 2004 first quarter was primarily the result of
decrease operating profit of the DataNational directory publishing
division and a loss incurred in Uruguay compared to a profit in last
year's first quarter, partially offset by an increase in operating
profit for the Directory Production division. The decrease for Data
National was the result of a different mix of directories published in
the quarter with lower gross margins than those published in the first
quarter of 2004. The increase in operating profit for the Directory
Production unit was primarily the result of revenue from the
implementation and customer acceptance of a system installation.
TELECOMMUNICATIONS SERVICES
This segment continues to operate under the burden of decreased
spending by most of its customers and greater competition for the work
that is available. The decrease in sales compared to the fiscal 2004
first quarter of more than $4.5 million and a reduction of gross
margins resulted in an increased operating loss for the quarter of
$0.5 million. The fiscal 2004 first quarter included a non-recurring
$1.3 million charge related to a domestic consulting contract. The
primary reason for the increased loss was the reduction in revenue and
the $0.6 million loss incurred by the Business Systems division, which
in the first quarter of 2004 produced an operating profit of $1.2
million. The present strategy of the Segment is focused on a build up
of work in Voice over IP and other wireless work, on which many
telecommunications companies and cable companies are budgeting
substantial expenditures, and a continued effort to reduce overhead.
GENERAL CORPORATE EXPENSES
Increases in expenses for Sarbanes Oxley Act compliance,
professional fees, management compensation and disaster recovery
requirements were primarily responsible for the $0.7 million increase
in general corporate expenses. These expenses were 1.67% of total net
sales for the fiscal 2005 quarter, compared to 1.83% for the 2004
first quarter.
LIQUIDITY
Cash and cash equivalents, excluding restricted cash, increased to
$53.6 million at January 30, 2005 from $44.3 million at October 31,
2004. At January 30, 2005, the Company had sold a continuing
participating interest in accounts receivable of $60.0 million under
its securitization program and had the ability to finance up to an
additional $90.0 million under the facility, which unless extended,
expires in April 2006.
In addition, the Company may borrow under a $30.0 million
revolving credit facility, under which borrowings are limited by a
specific borrowing base. At January 30, 2005, the Company had borrowed
1.5 million British pounds ($2.8 million), under this facility. The
Company is in discussions with its banks to extend the credit facility
which currently expires in April 2005.
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
January 30, February 1,
2005 2004(1)
----------------- ---------------
(In thousands, except per share amounts)
Net sales $497,835 $413,959
================= ===============
Income before minority
interest and income taxes $208 ($1,898)
Minority interest - Note A (1,494) -
----------------- ---------------
Loss before income taxes (1,286) (1,898)
Income tax benefit 478 745
----------------- ---------------
Net loss ($808) ($1,153)
================= ===============
Per Share Data
Net loss per share-basic and
diluted ($0.05) ($0.08)
================= ===============
Weighted average number of
shares outstanding 15,291 15,222
================= ===============
(1) As previously announced, the Company has restated its previously
issued financial statements for the first two quarters of fiscal
year 2004 as a result of inappropriate application of accounting
principles for revenue recognition by its telephone directory
publishing operation in Uruguay. Accordingly, sales have been
increased by $1.3 million and the net operating loss has been
reduced by $0.4 million for the three months ended February 1,
2004.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FIRST QUARTER ENDED
January 30, February 1,
2005 2004(1)
----------------- ---------------
(Dollars in thousands)
Net Sales
- ---------
Staffing Services-Note B
Traditional staffing $414,094 $342,676
Managed services 297,432 238,098
----------------- ---------------
Total gross sales 711,526 580,774
Less non-recourse managed services (291,193) (233,133)
----------------- ---------------
Net Staffing Services sales 420,333 347,641
Telephone Directory 15,704 15,849
Telecommunications Services 25,204 29,896
Computer Systems 41,194 24,095
Elimination of intersegment sales (4,600) (3,522)
----------------- ---------------
Total Net Sales $497,835 $413,959
================= ===============
Income (loss) before Minority Interest
and Income Taxes:
- --------------------------------------
Staffing Services $2,453 $1,391
Telephone Directory 2,107 2,599
Telecommunications Services (2,429) (1,902)
Computer Systems 7,514 4,523
----------------- ---------------
Total segment operating profit 9,645 6,611
Interest income and other (expense)
income, net (456) (516)
General corporate expenses (8,307) (7,560)
Interest expense (512) (457)
Foreign exchange gain, net (162) 24
----------------- ---------------
Income (loss) before Minority
Interest and Income Taxes $208 ($1,898)
================= ===============
(1) As previously announced, the Company has restated its previously
issued financial statements for the first two quarters of fiscal
year 2004 as a result of inappropriate application of accounting
principles for revenue recognition by its telephone directory
publishing operation in Uruguay. Accordingly, sales have been
increased by $1.3 million and the loss before minority interest
and income taxes has been reduced by $0.6 million for the three
months ended February 1, 2004.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
January 30, October 31,
2005 2004
------------------ ---------------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents,
including restricted cash of
$32,544 (2005) and $43,722 (2004)
- Note B $86,164 $88,031
Short-term investments 3,943 4,248
Trade receivables, net-Note C 389,887 409,130
Inventories 32,736 32,676
Recoverable income taxes 2,563 -
Deferred income taxes 9,488 9,385
Prepaid and other assets 13,352 14,847
------------------ ---------------
Total Current Assets 538,133 558,317
Property, plant and equipment, net 83,742 85,038
Deposits and other assets 1,617 1,539
Goodwill 29,144 29,144
Other intangible assets, net 15,722 15,998
------------------ ---------------
Total Assets $668,358 $690,036
================== ===============
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $7,384 $7,955
Current portion of long-term debt 408 399
Accounts payable 179,287 192,163
Accrued wages and commissions 49,053 54,200
Accrued taxes other than income
taxes 22,236 17,729
Other accruals 32,024 36,036
Deferred income and other
liabilities 36,766 36,909
Income taxes payable - 4,270
------------------ ---------------
Total Current Liabilities 327,158 349,661
Accrued insurance 79 86
Long-term debt 15,511 15,588
Deferred income taxes 11,258 11,764
Minority interest-Note A 37,914 36,420
Stockholders' Equity 276,438 276,517
------------------ ---------------
Total Liabilities and Stockholders'
Equity $668,358 $690,036
================== ===============
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
A - On August 2, 2004, Volt Delta Resources, LLC ("VoltDelta"), a
wholly-owned subsidiary of the Company, closed a Contribution
Agreement signed with Nortel Networks, Inc. ("Nortel Networks")
on June 11, 2004 under which Nortel Networks contributed certain
of the assets (consisting principally of customer base and
contracts, intellectual property and inventory) and certain
specified liabilities of its directory and operator services
("DOS") business to VoltDelta in exchange for a 24% minority
equity interest in VoltDelta. Together with its subsidiaries,
VoltDelta is reported as the Company's Computer Systems segment.
VoltDelta is using the assets acquired from Nortel Networks to
enhance the operation of its DOS business. The acquisition will
allow VoltDelta to provide the newly combined customer base with
new solutions, and expanded suite of products, content and
enhanced services.
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 January 30, 2005 and
October 31, 2004 balance sheets.
C - 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 $60.0 million at January 30, 2005
and $70.0 million at October 31, 2004. Accordingly, the trade
receivables included on the January 30, 2005 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