Exhibit 99.1
Volt Information Sciences Reports First Quarter Results
NEW YORK--(BUSINESS WIRE)--March 6, 2007--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's first quarter ended January 28, 2007.
Volt will conduct a conference call webcast at 10:00 A.M. (EST)
today to discuss first quarter results. The conference call dial-in
number is 800-857-6028 (domestic) or 210-234-0013 (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.
Attached is a summary of the Company's results of operations and
the notes thereto. The notes are an integral part of the summary.
FIRST QUARTER FISCAL 2007 RESULTS
For the first quarter of fiscal 2007 ended January 28, 2007, the
Company reported net income of $0.7 million, or $0.03 per share,
compared to a loss of $0.4 million, or $0.02 per share, in the fiscal
2006 first quarter. Net sales for the 2007 quarter decreased slightly
to $548.8 million, compared to $549.5 million in last year's
comparable quarter. Income before minority interest and income taxes
increased by $0.8 million, or 175%, compared to the 2006 comparable
quarter. The first quarter of fiscal 2006 included a charge for
minority interest of $1.0 million; such minority interest was
repurchased from Nortel Networks, Inc. on December 29, 2005.
Commenting on the results for the first quarter, Mr. Steven A.
Shaw, President and CEO of Volt, stated "Tight control of general and
administrative expenses, including year two savings on Sarbanes Oxley
and related audit costs, enabled the Company to post improved year
over year results in what is traditionally our flat quarter of the
year. This year and last year we reported marked improvement in
controlling our workers' compensation and general insurance costs. We
believe that controlling the cost of service delivery will make us
more efficient and more competitive."
STAFFING SERVICES
The $9.3 million, or 2%, increase in net sales in the first
quarter of fiscal 2007 from the comparable fiscal 2006 period was due
to an 8% increase in the Technical Placement division partially offset
by an 8% decrease in the Administrative and Industrial division. A
$2.0 million increase in the operating profit of the Technical
Placement division was partially offset by a $1.5 million increase in
the operating loss of the Administrative and Industrial division. The
net increase in operating profit of $0.5 million was due to the
increase in sales, an increase in gross margin percentage, primarily
due to an increase in higher-margin VMC Consulting project management
and consulting sales, reduced workers' compensation and payroll tax
costs, partially offset by an increase in overhead costs as a
percentage of sales. The 2007 first quarter also includes a $0.8
million gain on the settlement of a vendor dispute.
COMPUTER SYSTEMS
The Computer Systems segment's sales increase of $5.3 million, or
13%, in the first quarter of fiscal 2007 over the comparable 2006
period was primarily due to increases of $4.2 million in new business
as a result of the segment's acquisition of Varetis Solutions in
December 2005, an increase in the Maintech division's IT maintenance
sales of $0.5 million and a net increase of $0.6 million in the
segment's other divisions. The slight decrease in operating profit was
due to increases in overhead necessary to support the sales increase
and additional amortization of intangible assets, partially offset by
the increase in sales.
TELEPHONE DIRECTORY
The Telephone Directory segment's sales increase of $1.9 million,
or 12%, for the first quarter of fiscal 2007 from the comparable 2006
period primarily resulted from increases of $1.3 million, or 16%, in
publishing sales due to the timing of delivery of telephone
directories in Uruguay. The segment's operating profit decreased
slightly by $0.1 million, or 5%, primarily due to lower gross margins.
TELECOMMUNICATIONS SERVICES
The Telecommunications Services segment's sales decrease of $18.7
million, or 47%, in the first quarter of fiscal 2007 over the
comparable 2006 period was due to decreases of $16.1 million in the
Construction and Engineering division and $2.6 million in the Network
Enterprise Solutions division. The decreased sales in the Construction
and Engineering division in fiscal 2007 resulted from customer
acceptance of several large construction jobs in the comparable fiscal
2006 period. The segment sustained a loss of $0.7 million in the 2007
first quarter compared to an operating profit of $0.8 million in the
comparable prior year period 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 2006
quarter resulted from lower professional fees and costs related to
compliance with the Sarbanes-Oxley Act.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, excluding restricted cash, was $71.8
million at the end of the quarter. At January 28, 2007, the Company
had sold a participating interest in accounts receivable of $60.0
million under its securitization program and had the ability to
finance an additional $140.0 million under the facility.
In addition, the Company may borrow under a $40.0 million
revolving secured credit facility ("Credit Facility") and the
Company's wholly owned subsidiary, Volt Delta Resources ("Volt
Delta"), may borrow under a separate $70.0 million revolving secured
credit facility ("Delta Credit Facility"). The Credit Facility
terminates in April 2008 and The Delta Credit Facility terminates in
December 2009, unless extended. At January 28, 2007, Volt Delta had
borrowed $38.9 million under the Delta Credit 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)
FIRST QUARTER ENDED
January 28, January 29,
2007 2006
----------- -----------
(In thousands, except
per share data amounts)
Net sales $548,799 $549,508
=========== ===========
Income before minority interest and income
taxes $1,200 $437
Minority interest -- Note A - (1,021)
----------- -----------
Loss before income taxes 1,200 (584)
Income tax provision (benefit) 473 (207)
----------- -----------
Net income (loss) $727 ($377)
=========== ===========
Per Share Data
Net Income (loss) per share-basic and diluted $0.03 ($0.02)
=========== ===========
Weighted average number of shares outstanding
- basic 23,161 23,015
=========== ===========
Weighted average number of shares outstanding
- diluted 23,211 23,015
=========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FIRST QUARTER ENDED
January 28, January 29,
2007 2006
----------- -----------
Net Sales: (Dollars in thousands)
- ----------------------------------------------
Staffing Services -- Note B
Traditional Staffing $455,095 $445,627
Managed Services 294,499 251,076
----------- -----------
Total Gross Sales 749,594 696,703
Less: Non-Recourse Managed Services (282,645) (239,061)
----------- -----------
Net Staffing Services 466,949 457,642
Telephone Directory 17,643 15,785
Telecommunications Services 21,381 40,114
Computer Systems 46,532 41,274
Elimination of inter-segment sales (3,706) (5,307)
----------- -----------
Total Net Sales $548,799 $549,508
=========== ===========
Income before Minority Interest and Income
Taxes
Segment Operating Profit (Loss)
- ----------------------------------------------
Staffing Services $5,348 $4,829
Telephone Directory 2,152 2,261
Telecommunications Services (677) 768
Computer Systems 5,694 5,749
----------- -----------
Total Segment Operating Profit 12,517 13,607
General corporate expenses (10,283) (11,888)
----------- -----------
Total Operating Profit 2,234 1,719
Interest income and other (expense) (319) (573)
Foreign exchange loss - net (87) (253)
Interest expense (628) (456)
----------- -----------
Income before Minority Interest and Income
Taxes $1,200 $437
=========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
January 28, October 29,
2007 2006
----------- -----------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents $71,814 $38,481
Restricted cash - Note B 28,958 30,713
Short-term investments 4,717 4,709
Trade receivables, net -- Note C 409,798 390,799
Inventories 25,612 28,735
Recoverable income taxes 966 -
Deferred income taxes 7,865 9,167
Prepaid and other assets 34,262 37,280
----------- -----------
Total Current Assets 583,992 539,884
Property, plant and equipment, net 72,622 74,135
Deposits and other assets 2,079 2,247
Goodwill 50,355 50,896
Other intangible assets, net 31,253 31,959
----------- -----------
Total Assets $740,301 $699,121
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $43,572 $4,639
Current portion of long-term debt 480 470
Accounts payable 185,418 190,431
Accrued wages and commissions 55,557 59,387
Accrued taxes other than income taxes 26,378 20,186
Accrued insurance and other accruals 30,983 29,241
Deferred income and other liabilities 46,298 37,519
Income taxes payable - 3,626
----------- -----------
Total Current Liabilities 388,686 345,499
Accrued insurance 3,799 4,760
Long-term debt 12,703 12,827
Deferred income taxes 8,784 10,787
Stockholders' Equity 326,329 325,248
----------- -----------
Total Liabilities and Stockholders' Equity $740,301 $699,121
=========== ===========
(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 provided Volt Delta the resources
to focus on the evolving global market for directory information
systems and services. Varetis Solutions added 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.
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 January 28, 2007
and October 29, 2006 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 $60.0
million and $110.0 million at January 28, 2007 and October 29,
2006, respectively. Accordingly, the trade receivables included on
the January 28, 2007 and October 29, 2006 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 were distributed on January 26, 2007, to all
stockholders of record as of January 15, 2007. Share amounts and
per share data have been adjusted to reflect the stock split.
CONTACT: Volt Information Sciences, Inc.
Jack Egan and Ron Kochman, 212-704-2400
voltinvest@volt.com