Exhibit 99.1
Volt Information Sciences Announces Second Quarter Results
NEW YORK--(BUSINESS WIRE)--June 7, 2007--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's second quarter and six months ended April 29, 2007.
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 1-877-675-5901 (domestic) or 1-312-470-7207 (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_releases.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 2007 RESULTS
For the second quarter of fiscal 2007 ended April 29, 2007, the
Company reported net income of $6.4 million, or $0.28 per share,
compared to $9.1 million, or $0.39 per share, in the fiscal 2006
second quarter. Net sales for the 2007 quarter decreased by 4% to
$568.2 million, compared to $593.8 million in last year's comparable
quarter. Income before minority interest and income taxes decreased by
$4.8 million, or 31%, compared to the 2006 comparable quarter.
SIX MONTHS - FISCAL 2007 RESULTS
For the first six months of fiscal 2007, the Company reported net
income of $7.1 million, or $0.31 per share, compared to $8.7 million,
or $0.38 per share, last year. Net sales for the 2007 six-month period
decreased by 2% remaining at $1.1 billion. Income before minority
interest and income taxes was $11.9 million in the six months ended
April 29, 2007 compared to $15.9 million in the comparable fiscal 2006
period.
Commenting on the results for the second quarter, Mr. Steven A.
Shaw, President and Chief Executive Officer of Volt, stated "The delay
in certain Computer System segment's international projects and the
movement in the publication schedule of six higher margin directories
to the third quarter in the Telephone Directory segment, which had
been recognized in the second quarter the previous year, negatively
impacted the results for the quarter. While revenue in the Staffing
Services segment was slightly lower than the comparable quarter in the
prior year, gross margin increased as a result of lower workers
compensation expense and a continued increase in higher margin direct
placement and RPO services, consistent with our long term strategy for
the segment. Our Telecommunications Services segment has recently
begun work on a large multi-year award from a major telecommunications
provider that allows for potential increased profitability for the
segment going forward."
STAFFING SERVICES
Net sales for this segment decreased by 4% to $483.3 million
compared to the fiscal 2006 second quarter due to decreased staffing
business in the Administrative and Industrial division and a slight
decrease in sales in the Technical Placement division due to lower net
managed service sales. Despite the sales decrease, gross margin
increased due to reduced workers' compensation, payroll tax costs and
an increase in permanent placement revenue. Operating profit decreased
to $13.9 million from $14.5 million as a result of the decrease in net
sales and increased overhead costs associated with the higher margin
business.
COMPUTER SYSTEMS
The segment reported an operating profit of $5.0 million on net
sales of $45.2 million in the second quarter of fiscal 2007 compared
to an operating profit of $9.8 million on net sales of $52.1 million
in the comparable prior year period. The sales decrease is primarily
due to decreases in the European operations of $3.3 million, due to
the recognition of a project in the second quarter of fiscal 2006,
together with decreases reported in the other divisions of the
segment. The lower operating profit was the result of the reduced
sales, increased overhead and a decrease in gross margin.
TELEPHONE DIRECTORY
Net sales for this segment approximated $17.1 million while
operating profit decreased to $2.8 million in the fiscal 2007 second
quarter from $4.0 million on $17.2 million in revenue in the
comparable prior year period. The decrease in sales and operating
profit was primarily due to the mix of telephone directories delivered
in current quarter, compared to the prior year's quarter, and an
increase in lower margin printing sales in Uruguay.
TELECOMMUNICATIONS SERVICES
Net sales in this segment approximated $27.2 million while the
segment reported an operating profit of $0.4 million in the second
quarter of fiscal 2007 compared to an operating loss of $40,000 on
$27.3 million in revenue in the comparable prior year period.
Decreases in sales volume of the segment's Network Enterprise
Solutions division were substantially offset by an increase in the
Construction and Engineering division. The increase in operating
profit was due to improved gross margins due to a change in the mix of
jobs completed partially offset by an increase in overhead.
GENERAL CORPORATE EXPENSES
General corporate expenses decreased by $0.8 million, or 7%, due
to a one-time accrual of $1.2 million for death benefits related to
two senior corporate executives in the second quarter of fiscal 2006
partially offset by increased salaries and professional fees in the
comparable fiscal 2007 quarter.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, excluding restricted cash, was $46.0
million at the end of the quarter. At April 29, 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 secured $40.0 million
revolving 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"). At April 29, 2007, the Company had borrowed
$2.0 million in foreign currency under the Credit Facility and a total
of $27.1 million under the Delta Credit Facility, of which $5.6
million was borrowed in foreign currency.
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 InvestorRelations/Corporate Governance section.
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
SECOND QUARTER SIX MONTHS ENDED
ENDED
April 29, April 30, April 29, April 30,
2007 2006 2007 2006
--------- --------------------- -----------
(In thousands, except per share data)
Net sales $568,202 $593,811 $1,117,001 $1,143,319
========= ========= =========== ===========
Income before minority
interest and income taxes $10,652 $15,420 $11,852 $15,857
Minority interest -- Note A - - - (1,021)
--------- --------- ----------- -----------
Income before income taxes 10,652 15,420 11,852 14,836
Income tax provision (4,259) (6,310) (4,732) (6,103)
--------- --------- ----------- -----------
Net income $6,393 $9,110 $7,120 $8,733
========= ========= =========== ===========
Per Share Data
Net income per share -
basic and diluted $0.28 $0.39 $0.31 $0.38
========= ========= =========== ===========
Weighted average number of
shares outstanding -
basic 23,181 23,146 23,171 23,080
========= ========= =========== ===========
Weighted average number of
shares outstanding -
diluted 23,232 23,274 23,221 23,214
========= ========= =========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
SECOND QUARTER SIX MONTHS ENDED
ENDED
April 29, April 30, April 29, April 30,
2007 2006 2007 2006
--------- --------- ----------- -----------
Net Sales: (Dollars in thousands)
- --------------------------
Staffing Services -- Note B
Traditional Staffing $468,910 $484,557 $924,005 $930,184
Managed Services 334,326 273,791 628,825 524,867
--------- --------- ----------- -----------
Total Gross Sales 803,236 758,348 1,552,830 1,455,051
Less: Non-Recourse
Managed Services (319,887) (256,042) (602,532) (495,103)
--------- --------- ----------- -----------
Net Staffing Services 483,349 502,306 950,298 959,948
Telephone Directory 17,082 17,226 34,725 33,011
Telecommunications
Services 27,169 27,295 48,550 67,409
Computer Systems 45,186 52,137 91,718 93,411
Elimination of inter-
segment sales (4,584) (5,153) (8,290) (10,460)
--------- --------- ----------- -----------
Total Net Sales $568,202 $593,811 $1,117,001 $1,143,319
========= ========= =========== ===========
Income (Loss) Before
Minority Interest and
Income Taxes
Staffing Services $13,867 $14,496 $19,215 $19,325
Telephone Directory 2,767 4,017 4,919 6,278
Telecommunications
Services 383 (40) (294) 728
Computer Systems 5,013 9,837 10,707 15,586
--------- --------- ----------- -----------
Total Segment Operating
Profit 22,030 28,310 34,547 41,917
General corporate expenses (9,891) (10,669) (20,174) (22,557)
--------- --------- ----------- -----------
Total Operating Profit 12,139 17,641 14,373 19,360
Interest income and other
(expense)-net (260) (1,671) (579) (2,244)
Foreign exchange loss-net (366) (103) (453) (356)
Interest expense (861) (447) (1,489) (903)
--------- --------- ----------- -----------
Income Before Minority
Interest and Income Taxes $10,652 $15,420 $11,852 $15,857
========= ========= =========== ===========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
April 29, October 29,
2007 2006
--------- -----------
Assets (Dollars in
thousands)
Current Assets
Cash and cash equivalents $45,958 $38,481
Restricted cash - Note B 32,307 30,713
Short-term investments 4,967 4,709
Trade receivables, net -- Note C 438,077 390,799
Inventories 34,766 28,735
Recoverable income taxes 4,463 -
Deferred income taxes 7,566 9,167
Prepaid and other assets 38,043 37,280
--------- -----------
Total Current Assets 606,147 539,884
Property, plant and equipment, net 69,894 74,135
Deposits and other assets 1,742 2,247
Goodwill 50,354 50,896
Other intangible assets, net 30,154 31,959
--------- -----------
Total Assets $758,291 $699,121
========= ===========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to bank $32,933 $4,639
Current portion of long-term debt 490 470
Accounts payable 209,000 190,431
Accrued wages and commissions 58,033 59,387
Accrued taxes other than income taxes 25,342 20,186
Accrued insurance and other accruals 31,240 29,241
Deferred income and other liabilities 46,310 37,519
Income taxes payable - 3,626
--------- -----------
Total Current Liabilities 403,348 345,499
Accrued insurance 1,408 4,760
Long-term debt 12,576 12,827
Deferred income taxes 7,371 10,787
Stockholders' Equity 333,588 325,248
--------- -----------
Total Liabilities and Stockholders' Equity $758,291 $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 April 29, 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 April 29, 2007 and October 29, 2006, respectively. Accordingly, the
trade receivables included on the April 29, 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