Exhibit 99.1
Volt Information Sciences Announces Third Quarter Results
NEW YORK--(BUSINESS WIRE)--Sept. 6, 2007--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's third quarter and nine months ended July 29, 2007.
Volt will conduct a conference call webcast at 11:00 A.M. (EDT)
today to discuss third quarter results. The conference call dial-in
number is 1-888-552-9191 (domestic) or 1-210-234-0009 (international),
passcode: Third 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.
THIRD QUARTER - FISCAL 2007 RESULTS
For the third quarter of fiscal 2007 ended July 29, 2007, net
income increased by 9% to $9.1 million, or $0.40 per share, compared
to $8.4 million, or $0.36 per share, in the fiscal 2006 third quarter.
Net sales for the 2007 quarter increased by 4% to $610.5 million,
compared to $584.9 million in last year's comparable quarter. Income
before minority interest and income taxes increased by $0.3 million,
or 2%, compared to the 2006 comparable quarter.
NINE MONTHS - FISCAL 2007 RESULTS
For the first nine months of fiscal 2007, the Company reported net
income of $16.2 million, or $0.70 per share, compared to $17.1
million, or $0.73 per share, last year. Net sales for the 2007
nine-month period remained flat at $1.7 billion compared to the 2006
nine-month period. Income before minority interest and income taxes
was $26.5 million in the nine months ended July 29, 2007 compared to
$30.1 million in the comparable fiscal 2006 period.
Commenting on the results for the third quarter, Mr. Steven A.
Shaw, President and Chief Executive Officer of Volt, stated "We are
pleased to report an increase in earnings for the third fiscal quarter
due in part to the Computer Systems segment, which returned to
positive quarterly year over year comparisons, and the
Telecommunication Services segment, which has started to recognize
both revenue and profits from multi-year contracts. We are addressing
margin pressure in Technical Placement and the ongoing softening in
the Administrative and Industrial sector of the economy with greater
efficiencies and investments to support and grow our newer direct
placement and RPO service offerings."
STAFFING SERVICES
Net sales for this segment increased by 4% to $519.1 million
compared to the fiscal 2006 third quarter due to increased staffing
business and VMC Consulting sales in the Technical Placement division
offset by decreased business in the Administrative and Industrial
division. Despite the increase in sales, operating profit decreased to
$13.3 million from $16.2 million as a result of lower gross margin
percentage and increased overhead costs primarily associated with
newer business offerings including direct placement and RPO services.
COMPUTER SYSTEMS
The segment reported an operating profit of $6.9 million on net
sales of $47.4 million in the third quarter of fiscal 2007 compared to
an operating profit of $6.0 million on net sales of $46.3 million in
the comparable prior year period. The sales increase is primarily due
to an increase in the Maintech division's IT maintenance sales. The
increase in operating profit was the result of the increased gross
margin percentages due to the mix of business partially offset by
increased overhead.
TELEPHONE DIRECTORY
The segment reported an operating profit of $4.2 million on net
sales of approximately $21 million in the fiscal 2007 third quarter,
the same as in the comparable prior year period. The increase in sales
in the DataNational community telephone directory publishing sales was
offset by decreases in printing sales in Uruguay, while the increased
profitability of domestic directories was offset by the increased
losses of the Uruguayan operations.
TELECOMMUNICATIONS SERVICES
The segment reported an operating profit of $0.9 million on net
sales of $28.3 million in the third quarter of fiscal 2007 compared to
an operating loss of $0.2 million on net sales of $22.6 million in the
comparable prior year period. The improvement in profitability was due
to the increased sales and higher margins generated by an increase in
projects and the ramping up of a major telco services contract.
GENERAL CORPORATE EXPENSES
General corporate expenses decreased by $0.4 million, or 4%, in
the third quarter of fiscal 2007 due to lower professional fees than
the comparable fiscal 2006 quarter.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, excluding restricted cash, was $24.3
million at the end of the quarter. At July 29, 2007, the Company had
sold a participating interest in accounts receivable of $90.0 million
under its securitization program and had the ability to finance an
additional $110.0 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 $100.0 million revolving secured credit facility
("Delta Credit Facility"). At July 29, 2007, $20.6 million was drawn
under the Delta Credit Facility, of which $5.6 million was borrowed in
foreign currencies.
During the third quarter of fiscal 2007, the Company repurchased
approximately 752,000 shares of its common stock in the open market as
treasury stock at a cost of $15.0 million.
Volt Delta has received the necessary regulatory clearances to
proceed with its previously announced definitive merger agreement with
LSSi Corp. The transaction is expected to close within the next two
weeks and as a result of the merger, LSSi Data Corp. will become a
wholly owned subsidiary of Volt Delta. The total merger consideration
will be approximately $70 million in cash subject to adjustment based
upon the amount of LSSi's working capital on the closing date. For the
seven-month period from January through July 2007, LSSI had revenue of
$16.8 million and EBITDA of $4.2 million, including $0.5 million in
associated deal costs. The Company expects there to be significant
synergies between the operations and for the acquisition to become
accretive to earnings approximately six months after 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 Relations/Corporate Governance section.
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(UNAUDITED)
THIRD QUARTER ENDED NINE MONTHS ENDED
July 29, July 30, July 29, July 30,
2007 2006 2007 2006
---------- -------- ---------- ----------
(In thousands, except per share data)
Net sales $610,465 $584,914 $1,727,466 $1,728,233
========== ======== ========== ==========
Income before minority
interest and income taxes $ 14,614 $ 14,278 $ 26,466 $ 30,135
Minority interest -- Note A - - - (1,021)
---------- -------- ---------- ----------
Income before income taxes 14,614 14,278 26,466 29,114
Income tax provision (5,497) (5,925) (10,229) (12,028)
---------- -------- ---------- ----------
Net income $ 9,117 $ 8,353 $ 16,237 $ 17,086
========== ======== ========== ==========
Per Share Data
Net income per share - basic $ 0.40 $ 0.36 $ 0.70 $ 0.74
========== ======== ========== ==========
Net income per share -
diluted $ 0.40 $ 0.36 $ 0.70 $ 0.73
========== ======== ========== ==========
Weighted average number of
shares outstanding - basic 22,968 23,338 23,103 23,166
========== ======== ========== ==========
Weighted average number of
shares outstanding -
diluted 23,018 23,519 23,153 23,315
========== ======== ========== ==========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
THIRD QUARTER ENDED NINE MONTHS ENDED
July 29, July 30, July 29, July 30,
2007 2006 2007 2006
---------- ---------- ---------- ----------
Net Sales: (Dollars in thousands)
- --------------------------
Staffing Services -- Note
B
Traditional Staffing $ 509,003 $ 484,882 $1,433,008 $1,415,066
Managed Services 275,819 281,948 904,644 806,815
---------- ---------- ---------- ----------
Total Gross Sales 784,822 766,830 2,337,652 2,221,881
Less: Non-Recourse
Managed Services (265,729) (267,591) (868,261) (762,694)
---------- ---------- ---------- ----------
Net Staffing Services 519,093 499,239 1,469,391 1,459,187
Telephone Directory 20,802 21,426 55,527 54,437
Telecommunications
Services 28,347 22,550 76,897 89,959
Computer Systems 47,413 46,305 139,131 139,716
Elimination of inter-
segment sales (5,190) (4,606) (13,480) (15,066)
---------- ---------- ---------- ----------
Total Net Sales $ 610,465 $ 584,914 $1,727,466 $1,728,233
========== ========== ========== ==========
Income (Loss) Before
Minority Interest
and Income Taxes
Staffing Services $ 13,300 $ 16,248 $ 32,515 $ 35,573
Telephone Directory 4,243 4,243 9,162 10,521
Telecommunications
Services 943 (189) 649 539
Computer Systems 6,932 6,046 17,639 21,632
---------- ---------- ---------- ----------
Total Segment Operating
Profit 25,418 26,348 59,965 68,265
General corporate expenses (9,678) (10,126) (29,852) (32,683)
---------- ---------- ---------- ----------
Total Operating Profit 15,740 16,222 30,113 35,582
Interest income and other
(expense) 10 (1,094) (569) (3,338)
Foreign exchange loss -net (305) (351) (758) (707)
Interest expense (831) (499) (2,320) (1,402)
---------- ---------- ---------- ----------
Income Before Minority
Interest and Income Taxes $ 14,614 $ 14,278 $ 26,466 $ 30,135
========== ========== ========== ==========
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
July 29, October 29,
2007 2006
---------- -----------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents $ 24,265 $ 38,481
Restricted cash - Note B 34,149 30,713
Short-term investments 5,152 4,709
Trade receivables, net -- Note C 419,097 390,799
Inventories 45,262 28,735
Recoverable income taxes 3,876 -
Deferred income taxes 8,314 9,167
Prepaid insurance and other assets 32,663 37,280
---------- -----------
Total Current Assets 572,778 539,884
Property, plant and equipment, net 69,884 74,135
Insurance and other assets 9,461 2,247
Goodwill 50,354 50,896
Other intangible assets, net 29,043 31,959
---------- -----------
Total Assets $731,520 $699,121
========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to banks $ 24,405 $ 4,639
Current portion of long-term debt 500 470
Accounts payable 203,055 190,431
Accrued wages and commissions 59,475 59,387
Accrued taxes other than income taxes 22,664 20,186
Accrued insurance and other accruals 27,906 29,241
Deferred income and other liabilities 45,486 37,519
Income taxes payable - 3,626
---------- -----------
Total Current Liabilities 383,491 345,499
Accrued insurance 1,248 4,760
Long-term debt 12,448 12,827
Deferred income taxes 6,284 10,787
Stockholders' Equity 328,049 325,248
---------- -----------
Total Liabilities and Stockholders' Equity $731,520 $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 balance sheet.
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 $90.0
million and $110.0 million at July 29, 2007 and October 29, 2006,
respectively. Accordingly, the trade receivables included on the
July 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