Exhibit 99.1
Volt Information Sciences Announces First Quarter Results
NEW YORK--(BUSINESS WIRE)--March 7, 2006--Volt Information Sciences, Inc.
(NYSE: VOL) today reported financial results for the Company's first quarter
ended January 29, 2006.
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
1-888-469-0571 (Domestic) or 1-517-623-4001 (International), passcode: First
Quarter. The conference call will be broadcast live over the Internet and can be
accessed for the next 30 days at htpp://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 fiscal 2006 first quarter, ended January 29, 2006, the Company
reported a net loss of $0.4 million, or $0.02 per share, compared to a net loss
of $0.8 million, or $0.05 per share in the fiscal 2005 first quarter. Net sales
increased by 10% to $549.5 million, compared to $497.8 million in last year's
comparable quarter. Income before minority interest and income taxes increased
to $0.4 million in the quarter compared to $0.2 million in the comparable fiscal
2005 quarter.
Segment operating profit increased 41% to $13.6 million in the fiscal 2006
first quarter compared to $9.6 million in the 2005 first quarter. This increase
was offset by a $3.6 million increase in general corporate expenses, primarily
the result of increased audit and Sarbanes-Oxley compliance charges related to
the 2005 fiscal year.
As previously announced, the Company's subsidiary, Volt Delta Resources
LLC, purchased from Nortel Networks Inc. its 24% minority interest in Volt Delta
on December 29, 2005 and acquired varetis AG's subsidiary, Varetis Solutions
GmbH on December 30, 2005.
The Company stated that the strong growth in segment operating profit and
revenue occurred in what is a historically flat quarter due to the number of
holidays and associated customer closings. Of particular note is the significant
improvement in results over the 2005 first quarter for the Telecommunications
Services segment and the Administrative and Industrial division of the Staffing
Services segment. While overall results were negatively impacted by the material
expenses incurred related to Sarbanes-Oxley and audit fees for the 2005 fiscal
year, the Company expects that these charges will be reduced in the future.
STAFFING SERVICES
Net sales for this segment increased by 9% to $457.6 million compared to
the fiscal 2005 first quarter, while operating profit increased to $4.8 million
from $2.5 million. The increase in operating profit was the result of increased
permanent placement revenue in both the Technical and Administrative and
Industrial divisions and a $1.8 million reduction in workers' compensation
costs, which more than offset lower profitability of the VMC Consulting
division.
COMPUTER SYSTEMS
Net sales for this segment were $41.3 million, approximately the same as
the comparable prior year's quarter; however, operating profit decreased by 24%
to $5.7 million due to increased overhead. The quarter includes the results of
one month of Varetis Solutions GmbH, which was acquired on December 30, 2005.
TELEPHONE DIRECTORY
This segment reported an operating profit of $2.3 million on sales of $15.8
million, approximately the same results as the fiscal 2005 first quarter.
TELECOMMUNICATIONS SERVICES
This segment continued to improve as sales increased by 59% to $40.1
million compared to the fiscal 2005 first quarter. Included in the quarter was
the recognition of $10.8 million in revenue due to the completion of a
construction project. The segment reported an operating profit of $0.8 million
in the fiscal 2006 first quarter compared to an operating loss of $2.4 million
in the comparable prior year's period. All divisions in this segment produced
improved results over the 2005 quarter, primarily the result of reduced overhead
expense as a percentage of revenue achieved through the reorganization of the
segment.
GENERAL CORPORATE EXPENSES
General corporate expenses increased by $3.6 million or 43% as a result of
higher professional fees and other costs related to compliance with the
Sarbanes-Oxley Act.
LIQUIDITY
Cash and cash equivalents, excluding restricted cash, decreased to $46.6
million at January 29, 2006 from $62.0 million at October 30, 2005. At January
29, 2006, the Company had sold a continuing participating interest in accounts
receivable of $100.0 million under its securitization program and as of January
29, 2006 had the ability to finance up to an additional $100.0 million under the
facility which expires in April 2008.
In addition, the Company may borrow under a $40.0 million revolving credit
facility, under which borrowings are limited by a specific borrowing base. At
January 29, 2006, the Company had borrowed 2.0 million Euros ($2.4 million)
under this facility.
In December 2005, Volt Delta paid approximately $50.0 million, principally
from cash on hand, for the Nortel Networks and Varetis Solutions transactions.
The remaining $36.8 million was paid on February 15, 2006 and was financed by
increasing the receivables sold under the securitization program to $140.0
million from $100.0 million.
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 include 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 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.
(Tables Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
FIRST QUARTER ENDED
January 29, January 30,
2006 2005
----------- -----------
(In thousands, except
per share amounts)
Net sales $549,508 $497,835
=========== ===========
Income before minority interest and income
taxes $437 $208
Minority interest - Note A (1,021) (1,494)
----------- -----------
Loss before income taxes (584) (1,286)
Income tax benefit 207 478
----------- -----------
Net loss ($377) ($808)
=========== ===========
Per Share Data
Net loss per share-basic and diluted ($0.02) ($0.05)
=========== ===========
Weighted average number of shares outstanding-
basic 15,343 15,291
=========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FIRST QUARTER ENDED
January 29, January 30,
2006 2005
----------- -----------
(Dollars in thousands)
Net Sales
- ---------
Staffing Services-Note B
Traditional staffing $445,627 $414,094
Managed services 251,076 297,432
----------- -----------
Total gross sales 696,703 711,526
Less non-recourse managed services (239,061) (291,193)
----------- -----------
Net Staffing Services sales 457,642 420,333
Telephone Directory 15,785 15,704
Telecommunications Services 40,114 25,204
Computer Systems 41,274 41,194
Elimination of intersegment sales (5,307) (4,600)
----------- -----------
Total Net Sales $549,508 $497,835
=========== ===========
Income (loss) before Minority Interest and
Income Taxes:
- -------------------------------------------
Staffing Services $4,829 $2,453
Telephone Directory 2,261 2,107
Telecommunications Services 768 (2,429)
Computer Systems 5,749 7,514
----------- -----------
Total segment operating profit 13,607 9,645
Interest income and other (expense) income,
net (573) (456)
General corporate expenses (11,888) (8,307)
Interest expense (456) (512)
Foreign exchange loss, net (253) (162)
----------- -----------
Income before Minority Interest and Income
Taxes $437 $208
=========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
January 29, October 30,
2006 2005
----------- -----------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents, including
restricted cash of $22,532 (2006) and
$26,131 (2005)-Note B $69,123 $88,119
Short-term investments 4,265 4,213
Trade receivables, net-Note C 361,065 399,677
Inventories 36,127 33,758
Recoverable income taxes 1,641 -
Deferred income taxes 10,653 10,246
Prepaid and other assets 24,610 19,788
----------- -----------
Total Current Assets 507,484 555,801
Property, plant and equipment, net 83,387 83,272
Deposits and other assets 1,881 2,102
Goodwill 52,085 32,623
Other intangible assets, net 33,777 14,914
----------- -----------
Total Assets $678,614 $688,712
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $6,621 $6,622
Note payable to Nortel-Note A 36,750 -
Current portion of long-term debt 2,442 2,404
Accounts payable 155,812 172,788
Accrued wages and commissions 53,127 55,081
Accrued taxes other than income taxes 23,481 17,586
Accrued insurance and other accruals 34,992 35,173
Deferred income and other liabilities 42,018 30,628
Income taxes payable - 1,686
----------- -----------
Total Current Liabilities 355,243 321,968
Accrued insurance 1,467 1,630
Long-term debt 13,183 13,297
Deferred income taxes 12,858 13,358
Minority interest-Note A 43,444
Stockholders' Equity 295,863 295,015
----------- -----------
Total Liabilities and Stockholders' Equity $678,614 $688,712
=========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
A - In December 2005, Volt Delta Resources, LLC ("Volt Delta"), the
principal business unit of the Computer Systems segment, purchased
from Nortel Networks, Inc. ("Nortel Networks") its 24% minority
interest in Volt Delta for $62.0 million, including an excess cash
distribution of $5.4 million. Nortel Networks had originally
purchased its 24% interest in August of 2004, and under the terms
of the original purchase agreement, each party had an option to
cause Nortel Networks to sell and Volt Delta to buy the minority
interest for an amount ranging from $25.0 million to $70.0
million.
During the quarter, Volt Delta also purchased Varetis Solutions
GmbH ("Varetis Solutions") from varetis AG for $24.8 million. The
acquisition allows Volt Delta to combine resources to focus on the
evolving global market for directory information systems and
services. Varetis Solutions adds technology in the area of
wireless and wireline database management, directory
assistance/inquiry automation and wireless handset information
delivery to Volt Delta's significant technology portfolio.
The preliminary allocation of the purchase price of the
transactions resulted in $19.5 million of goodwill and $19.3
million of intangible assets.
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 29, 2006 and
October 30, 2005 balance sheets.
C - Under a securitization program, the receivables related to the
staffing solutions business of the Company are sold from
time-to-time by the Company, through a 100%-owned consolidated
special purpose subsidiary to an unaffiliated third party. The
outstanding balance of the participation interest sold was $100.0
million at January 29, 2006 and October 30, 2005. Accordingly, the
trade receivables included on the January 29, 2006 and October 30,
2005 balance sheets have been reduced to reflect the $100.0
million participation interest sold.
CONTACT: Volt Information Sciences, Inc.
James J. Groberg/Ron Kochman, 212-704-2400
voltinvest@volt.com