Exhibit 99.1
Volt Information Sciences Announces Second Quarter Results
NEW YORK--(BUSINESS WIRE)--June 8, 2006--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's second quarter and six months ended April 30, 2006.
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 1-888-385-9734 (domestic) or 1-517-623-4202 (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 2006 RESULTS
For the second quarter of fiscal 2006 ended April 30, 2006, the
Company reported net income of $9.1 million, or $0.59 per share,
compared to $4.5 million, or $0.29 per share, in the fiscal 2005
second quarter. Net sales for the 2006 quarter increased by 9% to
$593.8 million, compared to $546.0 million in last year's comparable
quarter.
Income before minority interest and income taxes increased by $6.3
million, or 68%, compared to the 2005 comparable quarter. The minority
interest was repurchased from Nortel Networks, Inc. on December 29,
2005.
SIX MONTHS - FISCAL 2006 RESULTS
For the first six months of fiscal 2006, the Company reported net
income of $8.7 million, or $0.56 per share, compared to $3.7 million,
or $0.24 per share, last year. Net sales for the 2006 six-month period
increased by 10% to $1.1 billion compared to $1.0 billion last year.
Income before minority interest and income taxes was $15.9 million in
the six months ended April 30, 2006 compared to $9.4 million in the
comparable fiscal 2005 period.
Commenting on the results for the second quarter, Mr. Steven A.
Shaw, President and Chief Executive Officer of Volt, stated, "We are
pleased that our initiatives in Staffing Services are producing their
desired results. Strong demand and margin improvement in our Technical
Placement and Administrative and Industrial divisions, along with
growth in our higher margin Permanent Placement and Recruitment
Process Outsource (RPO) offerings are the primary drivers for the
Company's improved performance. Margin growth combined with aggressive
cost controls associated with workers' compensation and unemployment
insurance has had a positive effect. These improved results were
achieved in spite of higher SOX compliance costs and a one time charge
for death benefits related to the passing of two senior corporate
executives."
STAFFING SERVICES
Net sales for this segment increased by 11% to $502.3 million
compared to the fiscal 2005 second quarter while operating profit
doubled to $14.5 million from $7.3 million. The increase in the
operating profit was the result of increased revenue in both the
Technical and Administrative divisions, for both permanent placement
and traditional staffing, and a reduction in workers' compensation
expense, which more than offset lower profitability of the VMC
Consulting division.
COMPUTER SYSTEMS
The segment reported an operating profit of $9.8 million on net
sales of $52.1 million in the second quarter of fiscal 2006 compared
to an operating profit of $9.0 million on net sales of $42.9 million
in the comparable prior year period. The quarter includes $4.9 million
of new business revenue as a result of the Company's December 30, 2005
acquisition of Varetis Solutions GmbH.
TELEPHONE DIRECTORY
Net sales for this segment approximated $17 million while
operating profit increased to $4.0 million in the fiscal 2006 second
quarter from $2.5 million in the comparable prior year period. The
increase in operating profit was the result of increased sales in the
segment's community telephone directory division and the timing of the
distribution of higher margin directories.
TELECOMMUNICATIONS SERVICES
Net sales in this segment decreased in the second quarter of
fiscal 2006 to $27.3 million from $37.9 million and the segment
reported a $40,000 operating loss compared to an operating profit of
$0.2 million in the comparable prior year period. The results of the
quarter were negatively impacted by reduced sales and lower gross
margins in the Construction and Engineering division.
GENERAL CORPORATE EXPENSES
General corporate expenses increased by $1.7 million, or 19%, due
to a one-time accrual of $1.2 million for death benefits related to
two senior corporate executives, increased salaries, professional fees
and costs related to compliance with the Sarbanes-Oxley Act.
LIQUIDITY
Cash and cash equivalents, excluding restricted cash, was $44.8
million at the end of the quarter. At April 30, 2006, the Company had
sold a participating interest in accounts receivable of $140.0 million
under its securitization program and had the ability to finance an
additional $60.0 million under the facility.
In addition, the Company may borrow under a secured $40.0 million
revolving credit facility. At April 30, 2006, the Company had borrowed
6.0 million Euros ($7.6 million) under the 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 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.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
SECOND QUARTER ENDED SIX MONTHS ENDED
April 30, May 1, April 30, May 1,
2006 2005 2006 2005
--------------------------------------------
(In thousands, except per share data)
Net sales $593,811 $546,045 $1,143,319 $1,043,880
============================================
Income before minority
interest and income taxes $15,420 $9,166 $15,857 $9,374
Minority interest --
Note A - (1,759) (1,021) (3,253)
--------------------------------------------
Income before income taxes 15,420 7,407 14,836 6,121
Income tax provision (6,310) (2,880) (6,103) (2,402)
--------------------------------------------
Net income $9,110 $4,527 $8,733 $3,719
============================================
Per Share Data
Basic
Net income $0.59 $0.30 $0.57 $0.24
============================================
Diluted:
Net income $0.59 $0.29 $0.56 $0.24
============================================
Weighted average number of
shares outstanding -
basic 15,431 15,324 15,387 15,307
============================================
Weighted average number of
shares outstanding -
diluted 15,516 15,446 15,476 15,444
============================================
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
SECOND QUARTER ENDED SIX MONTHS ENDED
April 30, May 1, April 30, May 1,
2006 2005 2006 2005
--------------------------------------------
Net Sales: (Dollars in thousands)
- ----------
Staffing Services -- Note B
Traditional Staffing $484,557 $442,822 $930,184 $856,916
Managed Services 273,791 312,334 524,867 609,766
--------------------------------------------
Total Gross Sales 758,348 755,156 1,455,051 1,466,682
Less: Non-Recourse
Managed Services (256,042) (302,292) (495,103) (593,485)
--------------------------------------------
Net Staffing Services 502,306 452,864 959,948 873,197
Telephone Directory 17,226 17,369 33,011 33,073
Telecommunications
Services 27,295 37,935 67,409 63,139
Computer Systems 52,137 42,920 93,411 84,114
Elimination of inter-
segment sales (5,153) (5,043) (10,460) (9,643)
--------------------------------------------
Total Net Sales $593,811 $546,045 $1,143,319 $1,043,880
============================================
Income (Loss) Before
Minority Interest and
Income Taxes
Staffing Services $14,496 $7,263 $19,325 $9,716
Telephone Directory 4,017 2,501 6,278 4,608
Telecommunications
Services (40) 193 728 (2,236)
Computer Systems 9,837 9,015 15,586 16,529
--------------------------------------------
Total Segment Operating
Profit 28,310 18,972 41,917 28,617
General corporate expenses (10,669) (8,976) (22,557) (17,283)
--------------------------------------------
Total Operating Profit 17,641 9,996 19,360 11,334
Interest income and other
(expense)-net (1,671) (290) (2,244) (746)
Foreign exchange loss-net (103) (98) (356) (260)
Interest expense (447) (442) (903) (954)
--------------------------------------------
Income Before Minority
Interest and Income Taxes $15,420 $9,166 $15,857 $9,374
============================================
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
April 30, October 30,
2006 2005
------------------------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents $44,785 $61,698
Restricted cash 20,478 26,421
Short-term investments 4,371 4,213
Trade receivables, net -- Note C 355,647 399,677
Inventories 37,397 33,758
Recoverable income taxes 1,424 -
Deferred income taxes 7,384 10,246
Prepaid and other assets 24,333 19,788
------------------------
Total Current Assets 495,819 555,801
Property, plant and equipment, net 81,919 83,272
Deposits and other assets 1,804 2,102
Goodwill 50,484 32,623
Other intangible assets, net 34,085 14,914
------------------------
Total Assets $664,111 $688,712
========================
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $11,547 $6,622
Current portion of long-term debt 452 2,404
Accounts payable 166,015 172,788
Accrued wages and commissions 55,341 55,081
Accrued taxes other than income taxes 22,473 17,586
Accrued insurance and other accruals 33,414 35,173
Deferred income and other liabilities 37,207 30,628
Income taxes payable - 1,686
------------------------
Total Current Liabilities 326,449 321,968
Accrued insurance 748 1,630
Long-term debt 13,067 13,297
Deferred income taxes 15,410 13,358
Minority interest -- Note A - 43,444
Stockholders' Equity 308,437 295,015
------------------------
Total Liabilities and Stockholders' Equity $664,111 $688,712
========================
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 a one-year
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, exercisable starting August 2006.
During the first fiscal quarter of 2006, Volt Delta also purchased
Varetis Solutions GmbH ("Varetis Solutions") from varetis AG for
$24.8 million. The acquisition provides Volt Delta the 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 $17.9 million of goodwill and $20.8
million of intangible assets in fiscal 2006.
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
segregated from cash and cash equivalents on the April 30, 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 $140.0
million and $100.0 million at April 30, 2006 and October 30, 2005,
respectively. Accordingly, the trade receivables included on the
April 30, 2006 and October 30, 2005 balance sheets have been
reduced to reflect the participation interest sold. During May
2006, the Company reduced the outstanding interest sold from
$140.0 million to $130.0 million.
D - The balance sheet data at October 30, 2005 has been reclassified
to conform to the current presentation.
CONTACT: Volt Information Sciences, Inc.
Jack Egan / Ron Kochman, 212-704-2400
voltinvest@volt.com