Exhibit 99.1
Volt Information Sciences Reports Fourth Quarter
and Fiscal Year Results
NEW YORK--(BUSINESS WIRE)--Jan. 9, 2007--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's fourth quarter and fiscal year ended October 29, 2006.
Volt will conduct a conference call webcast at 10:00 A.M. (EST)
today to discuss fourth quarter and fiscal year results. The
conference call dial-in number is 1-800-857-6028 (domestic) or
1-210-234-0013 (international), passcode: Fourth 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.
FOURTH QUARTER - FISCAL 2006 RESULTS
For the fourth quarter of fiscal 2006 ended October 29, 2006, the
Company reported net income of $13.6 million, or $0.86 per share,
compared to $8.4 million, or $0.54 per share, in the fiscal 2005
fourth quarter, an increase of 62%. Net sales for the 2006 quarter
increased by 3% to $610.2 million, compared to $590.2 million in last
year's comparable quarter. Income before minority interest and income
taxes increased by $4.3 million, or 25%, compared to the 2005
comparable quarter. The minority interest was repurchased from Nortel
Networks, Inc. on December 29, 2005.
FISCAL YEAR 2006 RESULTS
For the twelve months of fiscal 2006, the Company reported net
income of $30.7 million, or $1.97 per share, compared to net income of
$17.0 million, or $1.11 per share, in the comparable fiscal 2005
period, an increase of 80%. Net sales for the twelve months of fiscal
2006 increased by 7% to $2.3 billion, compared to $2.2 billion last
year. Income before minority interest and income taxes was $51.6
million in the fiscal year 2006 compared to $36.3 million last year,
an increase of 42%.
Commenting on the results for the fourth quarter and year, Mr.
Steven A. Shaw, President and CEO of Volt, stated "Staffing Services
continued to be the main force behind our improved fourth quarter and
full fiscal year results. Strong demand in our IT and Engineering
markets, tight control of workers' compensation and unemployment
costs, and solid execution of our business plan to focus on higher
margin clients and services were the primary drivers for the improved
results. In addition to our Staffing Services segment, the Directory
Services and Computer Systems segments continue to be major
contributors to the bottom line. We are pleased with both our results
and corporate initiatives and are confident that our capable employees
and broad array of workforce, technology, and telecommunications
solutions will provide us with the opportunity and ability to continue
to grow our Company."
STAFFING SERVICES
The $34.7 million, or 7%, increase in sales in the fourth quarter
of fiscal 2006 from the comparable fiscal 2005 period was due to a 12%
increase in the Technical Placement division partially offset by a 1%
decrease in the Administrative and Industrial division. The increase
in operating profit of $8.7 million was due to the increase in sales,
an increase in gross margin percentage, primarily due to an increase
in high-margin direct placement business, reduced workers'
compensation and payroll tax costs, and a decrease in overhead costs
as a percentage of sales. The segment has been working closely with
customers to better manage worker's compensation costs which are
approximately $1.4 million below last year's run rate for the quarter.
The most significant aspect of the reduction in overhead costs as a
percentage of sales was a reduction of approximately $4.2 million in
general insurance costs as a result of retrospective adjustments
related to the division's positive claim experience.
COMPUTER SYSTEMS
The Computer Systems segment's sales increase of $3.0 million, or
7%, in the fourth quarter of fiscal 2006 over the comparable 2005
period was primarily due to increases of $5.5 million in new business
as a result of the segment's acquisition of Varetis Solutions in
December 2005 and an increase in the Maintech division's IT
maintenance sales of $0.9 million partially offset by decreases in the
segment's other divisions. The decrease in operating profit of $4.4
million was due to decreased gross margins, increases in overhead
necessary to support the sales increase and additional amortization of
intangible assets.
TELEPHONE DIRECTORY
The Telephone Directory segment's sales decrease of $0.4 million,
or 2%, for the fourth quarter of fiscal 2006 from the comparable 2005
period resulted from decreases of $0.6 million, or 3%, in publishing
sales due to the timing of delivery of telephone directories. The
segment's operating profit increased by $0.6 million, or 13%,
primarily due to increased gross margins.
TELECOMMUNICATIONS SERVICES
The Telecommunications Services segment's sales decrease of $16.1
million, or 36%, in the fourth quarter of fiscal 2006 over the
comparable 2005 period was due to decreases of $14.5 million in the
Construction and Engineering division and $1.6 million in the Network
Enterprise Solutions division. The higher sales in the Construction
and Engineering division in fiscal 2005 resulted from customer
acceptance of several large construction jobs in that year. The
segment sustained a loss of $1.7 million in the 2006 fourth quarter
compared to an operating profit of $0.8 million in the prior year due
to the decreased sales and higher overhead as a percentage of sales.
GENERAL CORPORATE EXPENSES
The decrease in General Corporate expenses compared to the 2005
quarter was related to higher professional fees and costs related to
the first year compliance with the Sarbanes-Oxley Act in the 2005
quarter.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, excluding restricted cash, was $38.5
million at the end of the quarter. At October 29, 2006, the Company
had sold a participating interest in accounts receivable of $110.0
million under its securitization program and had the ability to
finance an additional $90.0 million under the facility.
In addition, the Company may borrow under a $40.0 million
revolving secured credit facility. The facility requires the
maintenance of certain accounts receivable balances in excess of
borrowings and terminates in April 2008 unless extended.
Effective December 19, 2006, the Company's wholly owned
subsidiary, Volt Delta Resources ("Delta") entered into a stand-alone
three year $70.0 million secured, syndicated, revolving credit
agreement ("Delta Credit Facility") with Wells Fargo,N.A. as the
administrative agent and arranger, and as a lender thereunder. Wells
Fargo and the other three lenders under the Delta Credit Facility,
Lloyd TSB Bank Plc, Bank of America, N.A and JPMorgan Chase also
participate in the Company's $40.0 million revolving credit facility.
Neither the Company nor Delta guarantee each other's facility but
certain subsidiaries of both are guarantors of their respective parent
companies. Under the Delta Credit Facility, Delta is required to pay
down approximately $38.0 million in intercompany debt owed to the
Company within 30 days of closing.
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)
FOURTH QUARTER ENDED FISCAL YEAR ENDED
October 29, October 30, October 29, October 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Dollars in thousands, except per share data)
Net sales $610,220 $590,224 $2,338,453 $2,177,619
=========== =========== =========== ===========
Income before minority
interest and income
taxes 21,434 17,098 $51,569 $36,293
Minority interest --
Note A - (2,320) (1,021) (7,024)
----------- ----------- ----------- -----------
Income before income
taxes 21,434 14,778 50,548 29,269
Income tax provision (7,870) (6,423) (19,898) (12,229)
----------- ----------- ----------- -----------
Net income $13,564 $8,355 $30,650 $17,040
=========== =========== =========== ===========
Per Share Data
Basic
Net income $0.87 $0.54 $1.98 $1.11
=========== =========== =========== ===========
Diluted:
Net income $0.86 $0.54 $1.97 $1.11
=========== =========== =========== ===========
Weighted average number
of shares outstanding
- basic 15,605,948 15,338,956 15,484,600 15,320,305
=========== =========== =========== ===========
Weighted average number
of shares outstanding
- diluted 15,736,770 15,387,689 15,591,825 15,416,968
=========== =========== =========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FOURTH QUARTER ENDED FISCAL YEAR ENDED
October 29, October 30, October 29, October 30,
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net Sales: (Dollars in thousands)
- -----------------------
Staffing Services --
Note B
Traditional Staffing $500,583 $468,771 $1,915,649 $1,765,838
Managed Services 302,500 269,063 1,109,315 1,157,168
----------- ----------- ----------- -----------
Total Gross Sales 803,083 737,834 3,024,964 2,923,006
Less: Non-Recourse
Managed Services (289,988) (259,406) (1,052,682) (1,121,196)
----------- ----------- ----------- -----------
Net Staffing Services 513,095 478,428 1,972,282 1,801,810
Telephone Directory 24,914 25,326 79,351 82,298
Telecommunications
Services 28,903 45,047 118,862 139,011
Computer Systems 48,214 45,199 187,930 173,119
Elimination of inter-
segment sales (4,906) (3,776) (19,972) (18,619)
----------- ----------- ----------- -----------
Total Net Sales $610,220 $590,224 $2,338,453 $2,177,619
=========== =========== =========== ===========
Income before Minority
Interest and Income
Taxes
Segment Operating
Profit (Loss)
- -----------------------
Staffing Services $23,226 $14,511 $58,799 $31,179
Telephone Directory 5,307 4,684 15,828 14,895
Telecommunications
Services (1,707) 790 (1,168) (2,429)
Computer Systems 6,815 11,222 28,447 35,801
----------- ----------- ----------- -----------
Total Segment Operating
Profit 33,641 31,207 101,906 79,446
General corporate
expenses (10,667) (12,336) (43,350) (38,839)
----------- ----------- ----------- -----------
Total Operating Profit 22,974 18,871 58,556 40,607
Interest income and
other (expense) (1,325) (1,191) (4,663) (2,234)
Foreign exchange gain
(loss) - net 202 (139) (505) (255)
Interest expense (417) (443) (1,819) (1,825)
----------- ----------- ----------- -----------
Income before Minority
Interest and Income
Taxes $21,434 $17,098 $51,569 $36,293
=========== =========== =========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
October 29, October 30,
2006 2005
------------- -------------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents, $38,481 $61,988
Restricted cash - Note B 30,713 26,131
Short-term investments 4,709 4,213
Trade receivables, net -- Note C 390,799 399,677
Inventories 28,735 33,758
Deferred income taxes 9,167 10,246
Prepaid insurance and other assets 37,280 19,788
------------- -------------
Total Current Assets 539,884 555,801
Property, plant and equipment, net 74,135 83,272
Deposits and other assets 2,247 2,102
Goodwill - Note A 50,896 32,623
Other intangible assets, net - Note A 31,959 14,914
------------- -------------
Total Assets $699,121 $688,712
============= =============
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $4,639 $6,622
Current portion of long-term debt 470 2,404
Accounts payable 190,431 172,788
Accrued wages and commissions 59,387 55,081
Accrued taxes other than income taxes 20,186 17,586
Accrued insurance and other accruals 29,241 35,173
Deferred income and other liabilities 37,519 30,628
Income taxes payable 3,626 1,686
------------- -------------
Total Current Liabilities 345,499 321,968
Accrued insurance 4,760 1,630
Long-term debt 12,827 13,297
Deferred income taxes 10,787 13,358
Minority interest -- Note A - 43,444
Stockholders' Equity 325,248 295,015
------------- -------------
Total Liabilities and Stockholders' Equity $699,121 $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 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 $18.3 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 October 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 $110.0
million and $100.0 million at October 29, 2006 and October 30,
2005, respectively. Accordingly, the trade receivables included on
the October 29, 2006 and October 30, 2005 balance sheets have been
reduced to reflect the participation interest sold.
D - On December 19, 2006, the Company's Board of Directors authorized
and approved a three-for-two stock split in the form of a dividend
on the Company's common stock, par value $.10 per share. Shares of
common stock will be paid on January 26, 2007, to all stockholders
of record as of January 15, 2007.
CONTACT: Volt Information Sciences, Inc.
Jack Egan and Ron Kochman, 212-704-2400
voltinvest@volt.com