Exhibit 99.1
Volt Information Sciences Reports Fourth Quarter and Fiscal Year Results
NEW YORK--(BUSINESS WIRE)--Dec. 20, 2007--Volt Information
Sciences, Inc. (NYSE: VOL) today reported financial results for the
Company's fourth quarter and fiscal year ended October 28, 2007.
Volt will conduct a conference call webcast at 11:00 A.M. (EST)
today to discuss fourth quarter results. The conference call dial-in
number is 1-800-857-3793 (domestic) or 1-210-234-0005 (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_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.
FOURTH QUARTER - FISCAL 2007 RESULTS
For the fourth quarter of fiscal 2007 ended October 28, 2007, net
income increased by 70% to $23.1 million, or $1.03 per share, compared
to $13.6 million, or $0.57 per share, in the fourth quarter of fiscal
2006. Net sales for the fourth quarter of fiscal 2007 increased by 3%
to $625.6 million, compared to $610.2 million in last year's
comparable quarter.
FISCAL YEAR 2007 RESULTS
For fiscal year 2007, the Company reported net income of $39.3
million, or $1.71 per share, compared to $30.7 million, or $1.31 per
share, last year. Net sales for fiscal year 2007 increased by 1% to
$2.4 billion, compared to $2.3 billion in fiscal 2006.
Commenting on the results for the fourth quarter, Mr. Steven A.
Shaw, President and Chief Executive Officer of Volt, stated "The
results of the fourth quarter continued the trend we reported in the
third quarter, with our Telecommunication Services and Computer
Systems segments delivering strong year over year comparisons, which,
combined with the improved performance of the Telephone Directory
segment, were the primary drivers for our growth in quarterly
earnings, while the Staffing segment continues to be challenged with
ongoing margin pressure in Technical Placement and softness in
Administrative and Industrial revenue. In addition, we closed the
acquisition of LSSi during the quarter in the Computer Systems segment
and expect the combination of Volt Delta's application development,
integration and hosting expertise and LSSi's highly efficient data
processing will allow Volt Delta to serve a broader base of customers
by aggregating the most current and accurate business and consumer
information possible."
FOURTH QUARTER - FISCAL 2007 RESULTS - BY SEGMENT
STAFFING SERVICES
The segment reported an operating profit of $21.1 million on net
sales of $501.5 million in the fourth quarter of fiscal 2007, compared
to an operating profit of $23.2 million on net sales of $513.1 million
in the prior year. The sales decrease was primarily due to a $12.1
million reduction in the Administrative and Industrial division. Sales
in the Technical Placement division remained constant at $342 million
as increases in traditional staffing business were offset by a decline
in VMC Consulting business. The decrease in operating profit was the
result of increased overhead associated with newer business offerings,
including direct placement and RPO services together with increased
general liability insurance costs, partially offset by an increase in
gross margins due to lower workers' compensation insurance costs and
payroll taxes. The operating profit of the Administrative and
Industrial division was $4.9 million in the fourth quarter of fiscal
2007 compared to $5.3 million in the prior year and the Technical
Placement division's operating profit was $16.2 million this year
compared to $17.9 million in last year's fourth quarter.
COMPUTER SYSTEMS
The segment reported an operating profit of $14.0 million on net
sales of $60.2 million in the fourth quarter of fiscal 2007, compared
to an operating profit of $6.8 million on net sales of $48.2 million
in the comparable prior year period. The sales increase is primarily
due to increases in previously deferred project revenue recognized and
the Maintech division's IT maintenance sales, as well as incremental
transaction revenue due to the LSSi Corp. ("LSSi") acquisition in
September 2007. The increase in operating profit was the result of the
increased sales and gross margin percentages due to the mix of
business.
In September 2007, Volt Delta Resources, LLC ("Volt Delta"), the
principal business unit of the Computer Systems segment, acquired LSSi
for $70.0 million and combined it and its DataServ division into
LSSiData. Sales and pre-tax income of LSSi approximated $28.0 million
and $5.0 million, respectively, for the twelve months prior to the
acquisition. Although Volt Delta expects there to be operational
efficiencies of approximately $8 million to $10 million on an annual
basis by eliminating duplicative data procurement and processing
costs, the segment will incur a charge to earnings in fiscal 2008 of
between $2.5 and $3.0 million. The acquisition is expected to become
accretive to earnings in the second quarter of fiscal year 2008.
Substantially all of the merger consideration was attributable to
goodwill and intangible assets.
TELEPHONE DIRECTORY
The segment reported an operating profit of $7.9 million on net
sales of $25.2 million in the fiscal 2007 fourth quarter, compared to
an operating profit of $5.3 million on net sales of $24.9 million in
the comparable prior year period. The slight increase in sales was
primarily due to an increase in telephone directory publishing sales
due to the timing of the delivery of directories partially offset by
decreases in printing sales in Uruguay. The increase in operating
profit is attributable to improved gross margin percentages due to the
sales mix.
TELECOMMUNICATIONS SERVICES
The segment reported an operating profit of $4.3 million on net
sales of $42.8 million in the fourth quarter of fiscal 2007 compared
to an operating loss of $1.7 million on net sales of $28.9 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 utility projects and the ramping up of a major telco services
contract.
GENERAL CORPORATE EXPENSES
General corporate expenses decreased by $0.7 million, or 7%, in
the fourth quarter of fiscal 2007 primarily due to lower depreciation
expense than the comparable fiscal 2006 quarter.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents, excluding restricted cash, was $40.4
million at the end of the quarter. At October 28, 2007, the Company
had sold a participating interest in accounts receivable of $120.0
million under its securitization program and had the ability to
finance an additional $80.0 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 October 28, 2007, $78.2 million was
drawn under the Delta Credit Facility, of which $6.2 million was
borrowed in foreign currencies.
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)
FOURTH QUARTER ENDED FISCAL YEAR ENDED
October 28, October 29, October 28, October 29,
2007 2006 2007 2006
------------------------------------------------
(In thousands, except per share data)
Net sales $ 625,616 $ 610,220 $ 2,353,082 $ 2,338,453
================================================
Income before
minority interest
and income taxes $ 35,748 $ 21,434 $ 62,214 $ 51,569
Minority interest 6 - 6 (1,021)
------------------------------------------------
Income before income
taxes 35,754 21,434 62,220 50,548
Income tax provision (12,659) (7,870) (22,888) (19,898)
------------------------------------------------
Net income $ 23,095 $ 13,564 $ 39,332 $ 30,650
================================================
Per Share Data
Net income - basic $ 1.03 $ 0.58 $ 1.71 $ 1.32
================================================
Net income - diluted $ 1.03 $ 0.57 $ 1.71 $ 1.31
================================================
Weighted average
number of shares
outstanding - basic 22,431 23,409 22,935 23,227
================================================
Weighted average
number of shares
outstanding -
diluted 22,479 23,605 22,985 23,388
================================================
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
FOURTH QUARTER ENDED FISCAL YEAR ENDED
October 28, October 29, October 28, October 29,
2007 2006 2007 2006
----------- ----------- ------------ ------------
Net Sales: (Dollars in thousands)
- ---------------------
Staffing Services --
Note A
Traditional
Staffing $ 489,255 $ 500,583 $ 1,922,263 $ 1,915,649
Managed Services 308,271 302,500 1,212,915 1,109,315
----------- ----------- ------------ ------------
Total Gross Sales 797,526 803,083 3,135,178 3,024,964
Less: Non-Recourse
Managed Services (295,982) (289,988) (1,164,243) (1,052,682)
----------- ----------- ------------ ------------
Net Staffing Services 501,544 513,095 1,970,935 1,972,282
Telephone Directory 25,248 24,914 80,775 79,351
Telecommunications
Services 42,815 28,903 119,712 118,862
Computer Systems 60,183 48,214 199,314 187,930
Elimination of inter-
segment sales (4,174) (4,906) (17,654) (19,972)
----------- ----------- ------------ ------------
Total Net Sales $ 625,616 $ 610,220 $ 2,353,082 $ 2,338,453
=========== =========== ============ ============
Income (Loss) Before
Minority Interest
and Income Taxes
Staffing Services $ 21,083 $ 23,226 $ 53,598 $ 58,799
Telephone Directory 7,897 5,307 17,059 15,828
Telecommunications
Services 4,328 (1,707) 4,977 (1,168)
Computer Systems 14,037 6,815 31,676 28,447
----------- ----------- ------------ ------------
Total Segment
Operating Profit 47,345 33,641 107,310 101,906
General corporate
expenses (9,918) (10,667) (39,770) (43,350)
----------- ----------- ------------ ------------
Total Operating
Profit 37,427 22,974 67,540 58,556
Interest income and
other (expense) (724) (1,325) (1,293) (4,663)
Interest expense (1,292) (417) (3,612) (1,819)
Foreign exchange gain
(loss) -net 337 202 (421) (505)
----------- ----------- ------------ ------------
Income Before
Minority Interest
and
Income Taxes $ 35,748 $ 21,434 $ 62,214 $ 51,569
=========== =========== ============ ============
(Notes Follow)
VOLT INFORMATION SCIENCES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
October 28, October 29,
2007 2006
----------- -----------
Assets (Dollars in thousands)
Current Assets
Cash and cash equivalents $ 40,398 $ 38,481
Restricted cash - Note A 25,482 30,713
Short-term investments 5,624 4,709
Trade receivables, net - Note B 417,115 390,799
Inventories 59,950 28,735
Deferred income taxes 10,031 9,167
Prepaid and other assets 39,927 37,280
----------- ------------
Total Current Assets 598,527 539,884
Property, plant and equipment, net 74,709 74,135
Insurance and other assets 6,648 2,247
Goodwill - Note C 98,715 50,896
Other intangible assets, net - Note C 53,829 31,959
----------- ------------
Total Assets $832,428 $ 699,121
=========== ============
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable to banks $ 84,111 $ 4,639
Current portion of long-term debt 510 470
Accounts payable 214,799 190,431
Accrued wages and commissions 64,049 59,387
Accrued taxes other than income taxes 22,440 20,186
Accrued insurance and other accruals 32,715 29,241
Deferred income and other liabilities 33,076 37,519
Income taxes payable 4,822 3,626
----------- ------------
Total Current Liabilities 456,522 345,499
Accrued insurance - 4,760
Long-term debt 12,316 12,827
Deferred income taxes 11,011 10,787
Minority interest 43 -
Stockholders' Equity - Note D 352,536 325,248
----------- ------------
Total Liabilities and Stockholders' Equity $832,428 $ 699,121
=========== ============
(Notes Follow)
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES
SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT
(UNAUDITED)
A- 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.
B- 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
$120.0 million and $110.0 million at October 28, 2007 and
October 29, 2006, respectively. Accordingly, the trade
receivables included on the October 28, 2007 and October 29,
2006 balance sheets have been reduced to reflect the
participation interest sold.
C- In September 2007, Volt Delta Resources, LLC ("Volt Delta"), the
principal business unit of the Computer Systems segment,
acquired LSSi Corp. for $70.0 million and combined it and its
DataServ division into LSSiData. Volt Delta expects there to be
significant synergies between the operations and for the
acquisition to become accretive to earnings in the second
quarter of fiscal year 2008.
In September 2007, the Company also purchased an 80% interest
for $1.5 million in an outsourcing and services provider that
will compliment existing services in the Staffing Services
segment.
In December 2005, Volt Delta purchased from Nortel Networks,
Inc. its 24% minority interest in Volt Delta and also purchased
Varetis Solutions GmbH from varetis AG.
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