VOLT - Earnings call transcript Q1 2019 | Volt Information Sciences, Inc.

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Operator

Greetings, and welcome to the Volt Information Sciences' First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lasse Glassen, Investor Relations for Volt Information Sciences. sir. you, Thank

begin. You may

Lasse Glassen

and Volt thank Conference us afternoon, for you Sciences' Fiscal for Information Earnings today XXXX Good joining First Call. Quarter

Chief closed remarks. Tomkins, news issued call Perneau, question-and-answer Chief to session the are the with Executive release, today. everyone A and Officer; after their should follow prepared access On Financial Officer. was and now, the Vice Senior today Paul will President By market and which President Linda have

release, it with the available on in If investors filed received you've Volt’s is Form X-K www.volt.com. the the not and SEC website section of at

Before from detailed those due filings of beginning risks Linda for future measures Sciences’ CEO, are A the afternoon. prepared Perneau. of Information to variety projected let release Actual believe to Volt's XXXX. condition. Linda? the turn included and call, today's Securities will on which made now made reference and useful to refer more statements financial earnings materially my speakers results will provide that information me impact remind Also to our recent Private our that certain results and issued of We of the we With press GAAP is financial reconciliation in may those the some non-GAAP imply this forward-looking pleasure it's to that, for a call operating President Company's measures, over investors. remarks, discussion will you SEC under Act or factors. of be Volt could Reform the today with the you the differ Litigation

Linda Perneau

then of with our for today's XXXX our conference position. including quarter priorities quarter Thank our call. update strategic quarter on I'll about operational additional overview you, Financial our Tomkins, and first you Chief fiscal call as joining today us liquidity for Officer, an well Good our financial fiscal Lasse. and afternoon, first earnings begin financial an first as performance, results, Paul provide XXXX. will details for key our thank

generated a execution reassuring in metric. nearly tenure to for financial just accomplishment. total performance off to business teams solid and which start same-store in are recorded in XXXX revenues as pleased year-over-year time expanded fiscal a year-over-year that one-year fiscal a attribute by first I am a we marks this net On at total our XX ago, the largely improved leadership first that of We report Volt impact quarter company basis I all good, and X%. the initiated improve within are in a delivery. XXXX. quarters actions revenue virtually currency turning trajectory since our growth American under in every we the sales foreign full decline, exited strengthen year operational the quarters, Volt growth key XX.X% and This current company Staffing drove last fluctuations, excludes of sales. QX a after Considering to three just we we meaningful growth engine is designed to growth North to service segment, year-over-year

professional gross Volt’s pricing emphasis growth margins retail categories, new compensation In and reducing basis. discipline addition, our our expenses, on on success commercial and year-over-year driving a in improved business on workers' in job

which discuss in efficiencies a reduction year-over-year in more benefits other see operational also costs. from enterprise. detail, achieve containment the to in We administrative in and across these continue to other resulted efforts total cost initiatives will and efforts operating our selling, Paul sharp

quarter to metrics the during EBITDA. key the in success adjusted year-over-year first in these collectively results operating improvement Volt’s Our contributed and

American the to the with seeing team. and that consolidated revenue. efforts ongoing commitment possible our globe. and around to our success Volt’s a we success of applaud Key proud period topline hard I North Volt’s short employees approximately would improving not lot the privileged have without business are the a work is accomplished in truly and of of such We to in dedicated and their and have be very work I a Staffing our am time passionate generates opportunity XX%

XXXX. North industry During focus to implement better aligned of segment the mid-market on first better revenue from initiative elements that benefit increased in that quarter, includes American recently roadmap continuing positioned to competitive organizational generally advantage are strategic we with growth we to rates North several where growth This revenue of Within foundational by topline fiscal from to year-over-year. That areas line Key American an our our win. Staffing is better or are included in our began and is Staffing, customers. X.X% Volt we than reported mid the restructuring staffing a peers. retail

opportunities We helped a multiple more much sales a built have and in sales more This has create are robust across also enterprise. and channels. the business operating we organization distinct wider sales bringing now new funnel, deeper

have retail in positive high-performance North continue both a we throughout level the has every Volt are impact sales combination Solution at hiring greater sourcing at country. momentum accountability the As Staffing finally, these far we and a across initiatives gain culture And sales to we instilled American across actively segment. the had Strategic organization. top and very sales, of The talent with

revenues compared win, focus positioned we to As are increase a on year. new a the with realignment to areas in and XX% where prior retail better associated result of experienced we clients

this average. points new company margin better approximately our was than business for XXX overall retail basis gross Importantly,

While to overall enterprise order better improvements the retail delivery service our growth. order we are structure, revenue organizational for our Further, have from achieve growth growth and strong fulfillment, this segment in generated goals ambitious we that in large in are stronger aware with year-over-year, to improvements well still existing pleased make we clients.

segment, We with the or at and to recruiting trends, strategic working in just foundational ahead many they technology aside people ability look connect on discussed, must North Staffing our focused of technology from once to advancement that priorities we As roadmap not up strategic work. of are we the aspects American XXXX our risk efforts help competitors. the our keep Traditional changing I our are falling behind improve were. like

During our part on our the that been as leveraging strategic business have front integrating of I priority, intended focus tools, objective system. optimization time, had enterprise-wide call we all fully September, and Since increasing with actively earnings of shared office productivity. last our field reporting processes our

an two update me in progress. been provide has hard work Let on areas. The team our key at

improve First, our a each on finally front integration posting, include job to efficiency. all tracking integrating consolidating tool system, ROI into job upgrade and in of single all and These board implementation designed job board. office

external ramp which quarter, large into easily and text during the office an allowed more system reach piloted live our also to in potential multiple have quickly. first candidates technology integrated We front tool for

are this a being tool, we success wider Given the end by with it now the launched is audience of experiencing to QX.

candidate improving improved of sales Second, technology to efforts, and the quality ultimately, have designed teams on candidate field productivity. the tools enhance experience, attraction, focused

we identifying have example, candidates For openings. tools robust our more to integrated posting support some been job field most the in job This fill to the nationally. expanded now of has

loss. patterns and system our buying activity integrated will behavior, well us for on This fully as satisfaction, a as satisfaction and based also potential have customer that see monitors behavior and allow and indicators actions outcomes. provide common office to tool front risk customer in of leading trends We

allow capabilities. changing to Enhancement also to our mobile in our on improve will remain technology efforts the economy. We working diligently us capabilities are on-demand mobile to competitive ever

equivalent. an As the year-over-year. FTE, XX% gross North optimization segment first per we result overall which realized margin upgrades, Staffing we increased In business a as field full-time or these of have productivity increase productivity, our quarter, in in define American

Now and workers let's our strategic service well onboarding priorities VCG of contingent managing turn or as and process which as MSP Group Volt payroll procurement for our segment, our North Consulting of solutions recruitment the comprises outsourcing consist and solutions. to American

change existing new allow first the better expanding quarter, excellence, and structure client structure existing VCG this better the operating to on operational will roles focus This our us accountable clients client clear winning we measure new expansion, new employees enables to to new programs. sales. During and hold responsibilities, By and for creating finalized and organization.

have strengthened to ability our We compete.

Given we decisions screen competitors. model, and managed of space. implement to for than and significant a the more our technology enable to need and and and throughout unique our will quality ability while make for showing we our many outsourcing than The can us and our be impact move competitors faster service put, technology provide quickly, user our cost programs. schedule, MSPs organization, operating integrations will to I includes and talent the increasing our engage benefit progress which flat of improvements our size in have talent Simply clients. experience. to savings can value flexible process, hierarchical agile mentioned Much

space a solution. sales we in are who and segment, turn that, engine. Singapore. North Volt’s Finally, to keeping professionals for region on the now Belgium, as Quality Paul? talent the like in International completed in on UK, the the win Tomkins, focus our onboard at Brexit Priorities necessary the Singapore close VCG are of is Belgium in would return a while growth. of want can office facilitated additional to to In case turning call continue Staffing focused Finding will the to in Planning are momentum to second that is managing is over competitive sensing finally the our expansion the hires priority finding cost. headwinds to Flemish activities. and steps and macro This managed launch in on the quarter part UK, sell sales second be new to and teams and was American taking Priorities a UK the review the I cost Belgium quarter Staffing sales new team. help tighter of business Paul results. our key good allowing first to industry to us the Volt in our in logos. actual also to of adding savings underway increasingly first talent very for the financial in talent to client And segment. the With speaking restructure quarter open eye highly

Paul Tomkins

afternoon, and discuss Linda, more quarter I you, will in first good the now financial performance detail. Thank everyone.

Our in resulted quarter XXXX in the significant first of following performance topline the milestones.

impact our million the of First, time exited second, and in first a for on million grew a business year-over-year revenues a X% the company exclude improved years. X.X on same-store or which basis. foreign revenues basis year-over-year $X.X $XXX.X nearly exchange total slightly And of

businesses quarter, segment. American more Staffing performance were year-over-year million and basis at was XX.X% basis, declined year-over-year American exchange were excluding by foreign driven North were million. Staffing in business revenue North year-over-year, continued exited, first negatively Kingdom. a a The due impact in by International American revenues On declines segment on to offset Our than $XXX.X $XX.X growth impacted in demand international same-store and year-over-year International revenue our Staffing segments. primarily Revenues X.X% United declined North other in on by a of the revenues our to the lower exchange. up X.X% foreign the revenues basis.

Our International segment deliver improved capacity results. the has to

business. we represents improvement services segment MSP and due American North loss the over to will past last several mix steps were have the X.X% a quarters decline $X.X We to improve programs Revenues margins. includes and year. higher to managed of of This in year-over-year our take early of a at continue revenue performance meaningful several larger the million, revenue

our segments streams for and that recall, multiple Volt. within Other one our revenue you large call generates may Corporate center As customer business supports

during lower of call and where revenue, points XX.X%, gross of the Total aimed revenue ongoing to be improved. to tends was business basis year-over-year, lower margin are improvement Along Contributing impacted The revenue gross increased XX a quarter margin volume is to continuing margin. our the quarter demand, marks delivered our each the center the order our lower expenses. initiatives margin Staffing customers gross basis, workers' compensation percentage higher As the increased consecutive American first well top realized to instance. expansion our at a volume we in as business, of which successfully news in volume approximately company volume overall retail in with gross clients was higher in improvements as represents that many of we quarter, low our segment. a margins revenues to are margin margins consolidated result year-over-year second were record specific several growth, of our by higher gross fruit. the improving North by and XX XX margins growth first gross in These on in This bear partially good which XX%. offset an top

improving improvement and with as processes, highly business of expense throughout We to to costs overall across focused as activities to drive operating work the benefit cost also $X.X our our We and are remain costs to the other the is continuing effective Much million making or industry efforts and standards. organization decisions. selling, our leasing our year-over-year. SG&A designed reduce attributed reduction on from administrative costs SG&A redistributing driving toward reorganizing in efficiencies corporate well XX.X%

a a of As XX.X% XX.X% improved a as percent compared result, SG&A to year-ago. with revenue

restructuring latest reinvest is savings expected annual marketing and approximately fiscal XXXX at enhancing generate a we initiatives. end $X.X recruiting our SG&A tools of will and portion these engine, While by our of savings expanding into new sales launching activity the our recruiting million, to

the We and $X.X of fiscal improvement. in $X.X the in International negative of loss Turning $X.X an to of a profitability EBITDA segments income million to follows. American income quarter quarter Adjusted company million in compared our a MSP in the fiscal an compared year This the in a compared XXXX. $X.X in total period. million quarter, notable Staffing operating Staffing, $X.X from was first Operating ago first million $X.X was American as million in for first of improved million year-ago American first XXXX, our loss operating quarter. experienced North segment negative to million to our loss of $XX.X the was period. Net the improvement quarter North North Staffing represents

our we margins for segment Operating overall the a managed delivery International increase margins MSP million million of $XX improved year the driving as to As liquidity in an ago the prior was primarily the of by line and of to our up first sales to operating revenue the million, had attribute position. well Staffing improvement the income we services. indicated, $X.X $X.X higher expenses. quarter, year-over-year liquidity global gross and business the with improved million in mix a period. quarter. income reduced million, Operating driven growth Shifting of gross quarter with a compared as in $X.X end strategies, first XXXX, quarter At due $X compared was of in we fiscal total our to

in million liquidity million the end first availability. of Linda. approximately Our was $XX at cash the comprised $XX Linda? I'd banks to borrowing turn call quarter global the With in in to like of that, and back

Linda Perneau

progress we are we Paul. is first from clear the is across achieved quarter enterprise. the What results you, in Thank that the making solid

continue the have profitability time our first XX expanded and year-over-year carefully in achieved costs Gross manage are We sharply growth margins for metrics SG&A quarters. revenue higher. year-over-year. to lower and are expenses, we

was As many guidance, even guidance. provided last of Volt you directional know, time quarter the first

We a to pleased able were striving we we exceed pattern are to continue. are

our at this are is I customers. in reductions more related prior early our we fiscal In realizing by segment. unexpected to North revenue industries of no the time. least current Other segments X% Volt point in decline threats. be our important working and we in declines too Corporate North segment to performance call single-digit our are consolidated MSP companies North note, to our Staffing from are uplift quarter business American second within the headcount these flat just the assure XXXX, For quarter, and Staffing our three and specific segment in in at segment Staffing headwinds American can than large largely to Staffing modest North It's the different lower to expect of center declines segment. you, American with currently roughly be come driven It common we International in year, in in in diligently American total

items. the questions, on comment like a up Before briefly more to call few I'd we open for

activity Board buying First, our and team. recent Management the by

business both I Board. are enterprise precluded during accounts. purchased the of genuinely stock participated. Board all We last and well demonstrates of the as as of all the from support As and officers, you performance to many quarterly insiders those with and Volt’s all the XX for our an team personal of shares of who advantage extended Management of were period stock support purchasing the to throughout from the continued aware, better employees our our our their that time. of shareholders' for Volt’s directors interests align and Section of outlook colleagues Volt’s took time, nearly commitment many period appreciate desire open This

in Board, indicated to like I recently directors and as Dana for and Messina Management two our Second, filed the of thank proxy, our sincerely On reelection next will standing at of be the not Siegel Meeting. for served Laurie Celia Board would behalf her skills the to nominated strong chaired their are the contribution. been looking and and has forward Board Laurie her the as committee. we Chairman service. years background to of HRCC and of Brown Dana given Annual previously

to would Now, I the open like for Operator? questions. up call

Operator

session. time, from Ladies Josh Thank first with & Vogel at and be will conducting your the we Company. [Operator a of Our is you. question. this proceed gentlemen, Please Instructions] question-and-answer question with Sidoti line

Joshua Vogel

Thank you. Good afternoon.

Linda Perneau

Josh. Hi,

Paul Tomkins

Josh. Hi,

Joshua Vogel

improvements – year's to Hi. you of what lines first realignment I can percent retail My is across all is from question question last mid-market and initiatives. first it's obviously nice see coming growth my quantify business business your the following clients? guess today and

Paul Tomkins

total in Retail Yes. is…

Linda Perneau

the I higher to Mid-market today. talk than total about makes our in another then – up is is our is significantly that. customers. XX% about ambitious rest obviously Retail We large goal of XX%, when goals, Josh, it and XX%

Joshua Vogel

in is progress will the margins. And the year? business Is XXX average we something as Okay. consolidated narrow that higher you your points think basis margin retail gross than the throughout

Linda Perneau

to that grow improve. and intent The that is continues

our that lot we're that did. pleased things are of we So the a – efforts

organization. segment North throughout instilled we So Staffing some discipline pricing the American

closely. very that monitoring are We

in for directors. that sales We our growth are as and directors our pricing expansion well information. strong tracking We've discipline place got

see to beginning pleased we and capacity need we're improvement are of margin still the of that those for There's still paying efforts to and still in improve. in place off see it. retail gross we So more where our have that growth to business. the we're We it need

Joshua Vogel

Great. to environment, the into first, pricing – I That leads discuss That's larger the dialogue next good your hear. Around you're with my guess actually price-competitive can you question. well customers? these with having

Linda Perneau

Yes.

So of things. number there's a

an did the is others increases Many within agreed So still path have period. price customers that. Many to for effort is already were budgeting year. their this we of underway. That out go for that

improve ways either other with term. So are reduce costs us help what we've payment negotiated example, for and/or them margin, that

through large customers. all we So of of working negotiations our those are

have very within We and continue being March. owned through by those conversations will organization people of specific the the those end

Joshua Vogel

Okay, missed commentary some you segment. restate I going great. just, when that? discussing your Can through please of were you each guidance

Linda Perneau

Yes.

So from group, negative expecting we our are international some impact right?

Joshua Vogel

Okay.

Linda Perneau

We're to in group. see declines continuing the international

realizing call center Other are disproportionate and segment. We Corporate in declines our our under also business

are VCGs or We improved business. on results the significantly MSP seeing

quarters despite very them ago, reasons QX modest So XX%, from from that the for the looks modest for decline see X.X% Staffing I in a in come that and – decline And three mentioned. quite of then we're going outlook American the QX positive. came to down with for North

Joshua Vogel

Right.

Okay.

all picking out mentioned two customers, as reductions one three businesses. now? get them How couple clients? headcount you Do a those dialogue Just up think separate short-term their you months from in hiring or see they're of quarter we So those event? large is with you do the quarter

Linda Perneau

Yes.

we this into is point QX. So important look really as

about quarter, up to clients three roughly we were was their is, XX%. It these million to customers Staffing roughly that were these we about news were of business made lower It that million. QX. This the will something these hit impacting, American $X numbers numbers. good them record unexpected. tune two anticipated. reductions, The headcount – of not again, was normalizing It $XX North three to segment to is is the unexpected headcount in high is XX% had impact that, have for the overall, about So

uplift that directors, sales our all we're we've through expansion been branch the restructuring directors. our BDM, from sales all that from network, and doing, So sales our that retail, and of done, from efforts from our our the seeing we've growth of

So everybody is contributing to that.

and as up. much we're hard pull. hard very going levers very we're full as make We've going or got pushing of are give amount to We around to that up plans the we to not – specific push can,

will we is million note down million, that to of So the that better engine we million, sales and past, it's I think the a of didn't result. modest million do whatever has the this In that $X make we the were me make $XX result a up. hard $X what in it or have number to is, sales more to that have the even and to We not we're engines happened $X.X didn't today, to past. important pushing that so say, same pains in so if decline,

Joshua Vogel

sneak back XXXX, million How into of Okay. job that Obviously, through cost-cutting one reinvested as you've forward? that with found fiscal I cost? if the that know more out about balance I of the a expect savings. be the more, Great. will could And we lot out it business. in the in a great more just I if we initiatives, annual of opportunities going bulk one think – done call curious may. to was to any I should have out look $X.X you

Linda Perneau

Go Paul. Yes. ahead,

Paul Tomkins

Yes.

We opportunities. have at always number we're opportunities – we're one, other that looking

that that result from we reductions as in will that not we're into the million additional activity processes. are And We included that our move SG&A last more $X.X in building have year. restructuring efficiencies That came forward.

Linda Perneau

integrate say differently been our efficiencies. into identified, And to gain look organization to structuring piggyback that, tools to would we system, continuing office Yes. we as I what as the as on productivity, to we've have drive continue we've that to front begun at Josh, is

headcount while productivity ongoing the organization and are will identifying at same allow structure reductions, improving time. we ways forward, We different that can the that going for

Joshua Vogel

very Thank all my for questions. That's you taking helpful. Okay.

Linda Perneau

Josh. Thanks,

Paul Tomkins

you, Josh. Thank

Operator

you. Thank

of ARS. question question. next your Please proceed line Taylor Our with Ross the is with from

Ross Taylor

Thank you.

really quarter congratulations a strong congratulations fact more and the on First, in turnaround. hard-to-imagine on

change and the period hear and You exciting of a and tone both see your short and radical the to team to a honestly execution. have for time it’s really there only it's quite been

should be deal away than shareholders trading more have that all very year think last a us pleased lot the walked at. Board paid late from that probably I wouldn't a So currently we're

much you thank for doing. guys all you very are So

Linda Perneau

Thank you.

Ross Taylor

And of you questions. of into related to to how have the things? like slide to is EBITDA issue the you much foreign the EBITDA, Brexit couple to Then it address second is positive problem that’s the think? second international do take I'd of really what's of One, going get side or problem question

Paul Tomkins

EBITDA Okay. Ross, let take me the question.

So we’re quarter. fairly number one, close this

we be the As ramping and EBITDA we the through year, for we position actually will will move year. finish in positive a

We for SG&A. continue variety to work we've on that both well the as reasons the of topline margins outlined as

So to really there down anticipate year. this end the EBITDA, the all driving we points but getting of by

Linda Perneau

say And sorry – then Ross. I’ll

Ross Taylor

fantastic. No, was EBITDA just to fading say positive long-term was hope investor, a something been mean, of me. from that that's actually I want the I having having

Linda Perneau

by Other our We're So than the I recognize for could don't it way to can definitely multiple you. say teams certainly we headwinds there will in different or Brexit. I'll are path percentage that put experiencing I Brexit take to What necessarily that, know question. the challenged that UK uncertainty. is from things Brexit despite I a ways. that control are

hasn't Brexit happen. know what going So yet We to yet. happened exactly is don't

aggressively segments as of impacted that We by the pursue others. have be the business will as opportunity to not Brexit

not may others. at new aggressively as to impacted We as Brexit aggressively segments look opportunity by have that the be

know UK, month I team past hard wins had the positive. quite the or several that so, They've with We're is have which to does closely they the working perform in incredibly capacity are So particularly happen. to make in them. better. the working

trying rather and we Scott focus can't. know I to what So team in than the what aggressively UK can on his control are we

Ross Taylor

traction your short question time. effort in have one Okay. has sales period of And I very then shown is a tremendous last

You've given effort really in how look you place? the you complimented everyone's the new and upsides time processes it do But much when been limited that more how at room that. procedures new much doing have in have more yourself, – how

Linda Perneau

have upside We tremendous potential.

as seeing growth I you in we So about, our if mentioned. retail think progress are

longer. little a bit that last been at since been doing year. that we've We've of So July

has So which are all a that those succeed, really team is better the with fit talent started better get is to off. organization, job efforts hiring and doing Strategic of the November. Solutions We're cultural paying didn't better until likelihood The higher aligns group a positive. very sales a

that has building. them So been

So they've been pipeline. the had a had are just couple We taking just of of we really one their see wins. They've yesterday. time influx now starting but to build wins, to

We about. or seven pipeline are close There significant are many pick are business, close. got far. that looking six super immediate has been up which have so excited several There transitioned wins revenue. a built. we We're means We've that at quite to

successful positive. identifying could When look that I on business about the have they have So a significant we lost, very in is that incredibly already as opportunities we side, talked That retaining opportunities VCG improvement and at the have side. been significant have wins, opportunities. new and that we uplift retail the we well. team has

into engines the should those and the definitely we and of see continue sales we throughout year So XXXX. the to have remainder of especially going, the windfalls

Paul Tomkins

that too. just add would on I one thing, Ross,

upon because going at a the feel, On to can percentage now, VCG business we we're opportunity we VCG our business from from MSPs. and we're more in the improve grows, definitely to where more those we it, VWS side, VWS right feed grow have into as

Ross Taylor

Okay. guys on It things. just an have turning to pad launching like exciting really amazing around. we're some I looks have the done say it job Well you for

to to team keep really management enough open shareholders the that's a say an mic. also to So good confident to talk up it's nice its over have and have I work,

Linda Perneau

Ross. Thank you,

Ross Taylor

Thanks a lot.

Linda Perneau

kind your Appreciate words.

Operator

and you. gentlemen, Ladies session. of we Thank question-and-answer have reached the our end

back Linda pass to concluding over to for So comments. floor any I Perneau the would like additional

Linda Perneau

your call. today's in call. be of Orange support Thank I'd Conference to that this all in on later ROTH for March participating XX. Investor month you Thank Thank you. you joining everybody the we will for like mention to the County on

XXXX also a with New are we at to quarter second Investor Spring York of you see forward Have we fiscal day. to you speaking report in again presenting March the look Otherwise, Conference when We on June. Sidoti our in early great there. City We many results hope XX.

Operator

for does time. and and Again, this teleconference. thank we may conclude your you at you Ladies gentlemen, today's lines this participation, your disconnect

Volt Information Sciences (VOLT) 7 Mar 192019 Q1 Earnings call transcript