VOLT - Earnings call transcript Q1 2021 | Volt Information Sciences, Inc.

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Operator

Greetings and welcome to Volt Information Sciences Inc.

First Quarter 2021 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. to Investor conference Relations. like host, to now Noyons, Joe would turn over the your I

Joe Noyons

first XXXX Thank you today Sciences for Omar. joining fiscal you, Good us for afternoon, Volt conference call. earnings everyone. Thank quarter year Information

company's President this today Herb Officer; issued afternoon, Vice and the Perneau, Senior After Officer. press Chief Chief Executive company On the Financial Linda the and is website call first President are the and Mueller, volt.com, quarter year market available for a closed on the results release the X-K. as filed its announcing well release website as at Form XXXX. as fiscal SEC The EDGAR a

We have the which of company's available also website. on presentation is the Investor section a prepared Relations supplemental

impact release issued President Linda? call With Perneau. of GAAP the of will condition. and more in afternoon. some due A investors. made statements and results of be forward-looking earnings beginning XXXX. measures the this Act the but to Linda under will a those pandemic that the provide like information potential financial variety believe and useful Before press I I certain Information remarks, that projected a SEC for of company’s today’s included made for measures, CEO, with are prepared Securities those reconciliation Volt's to to results differ Sciences' materially Actual would the non-GAAP [Technical risks our of operating recent business including, on detailed Litigation of reference or Private impacts discussion would is may future you operations. Reform you management We could filings factors, to to that, remind financial to from refer to, Volt implied the over turn like limited difficulty] which the we the not COVID-XX

Linda Perneau

level performance. actions share current our I Joe conclude momentum. market signaling financial and a to then on additional will also several the signs welcome the with each our results. QX recent "what for of positive brief of I'll industry everyone. ensure will our economic highlights summed into of and begin Herb Today an Thank months. top the provide some overview labor phrase, and you, and certainly shifts, with detail of makes", old up in difference insight a The And past sentiment year our business continued units occurring commentary

as Europe, children ongoing norm even the increased in for recovery. minimal the labor immunity indicating the to race all their is a to levels anniversary the has in India, recent at we this at heightens and optimism X-year as counties and As begin states of decreased This cases herd are dose that the December as shutdowns seem non-linear occur. least indicators operate begun. administer have COVID during pace been that the Positive their million and vaccine September over eclipsed first leveling activities Internationally, Recently, the however, year. somewhat mirror administered within vaccine fueling return over pattern. of doses the both onset, administered winter levels XXX after recently, in key slower significantly the to of we the new has month. Asia American and XX doses should the States. XX% More the CDC trends and be positive locations seeing began highest led COVID pandemic anticipation conditions distribution indicated and of support recent Despite the Since school, improving cases Pacific old of date that of the comfort by several COVID-XX million globally. economic vaccine have a suggest United of recovery reopening introduction XXXX, of hitting off to the XX% population to variants distribute current recurring receive to

fulfillment. across U.S. of April the lost lost of Looking jobs million lost and jobs the health and were than back February. and is such in February what March segment nearly gained, April, as more experiencing, gap. we're of 'XX, Through XXXX, the Industries have nearly XX% and been providing XX continue the will be having improve. jobs Constraints care, way this closing game. XX% talent led industry. and nearly front, distribution with nearly during XX.X less back million retail trade restrictions, temporary with jobs the to on state, on county gained broader the This those better consistent the travel vaccine, city hospitality, even specifically nurses, jobs and have faster situation an U.S recovering leisure manufacturing, in challenge are our anticipate last March Even the with combined X greatest pace. manufacturing job has logistics food jobs as We temporary particularly this supply the the news on and of Since of distribution at million

the earlier was international we my As regarding job case substantive continue less comments see openings. in to with trends, uplift

for synonymous first recovery half the week than of initial of recovery lockdown, first & Confederation, early highlighting the the U.S. in in the the week domestically postings companies a across XXXX as latter these January of disruptions shared Despite COVID-XX Volt 'XX unchanged certain July in 'XX in first April began the in fiscal throughout March remained industries multiple of which optimism continuing signs XX% encouraging. of Employment began 'XX, increase an was recently the broadly and by new XX% posted with restriction. about the than out glimmer the jobs in are and the number specifically abroad, business the Kingdom, Speaking ongoing of A weighed United in which week more job Recruitment the country's of third

the their although consistent of levels. and we coming of we near midst XXXX, existing combination higher in the business November. headwinds, or pre-pandemic pre-pandemic certain as improvement sequential set XXXX a ongoing monthly X-year of clients 'XX As ago. than momentum to previously remain the the albeit realized quarter we wins, in client strong beginning have we from year, level reported, new our pandemic prior This impactful July for than expansion stage revenue entered less And in fiscal was first return

we Positive first EBITDA QX, in positive both positive for the revenue first the third the in for EBITDA QX years. GAAP X and quarter time positive for adjusted achieved X growth outlook For consecutive to time year the at least years. due related also despite quarter in and positive prior experiencing unaffected weeks shutdowns shutdown. by The X winter for remained quite QX February's the and storm COVID widespread

Herb? and call to Herb the to turn additional the QX details now outlook. me provide on over overall Let financials

Herbert Mueller

growth Linda. adjusting FY in on to 'XX basis the GAAP first model currency posted was and company staffing the overall revenue of positive a American the comparable delivery $XXX year-over-year million, time Thank quarter year a North years slight segment, up Revenue compared the translations MSP in was After for prior $X.X revenue for million shift, quarter, improvement. our you, $XXX.X million quarter. X during which in first to due improvements for continued the

'XX, QX Direct to During line show our FY Hire improvement. of continued business

were For down from quarter. prior the year X.X% the quarter, we

but was our international Direct sequentially from the up year our North within was were quarter, offset versus staffing revenue within Hire higher a XXXX. by X.X% segment. we American segment prior decline QX However,

of prior $XX and second from North increased expansion American revenue our year clients. $XXX.X fiscal million, X.X% since business quarter. $X.X this reported segment of continued the improvement and time prior adjusted North adjusted the for a logos XXXX. attributable in staffing for in quarter our to X.X% first revenue increase for staffing million, combined revenue segment million, from each our increase market first into the the international staffing prior fiscal Adjusted MSP the XXXX, combination our at comparable segment began half improvement year. with of was XXXX, XX.X% reported of XXXX, fiscal adjusted Looking QX And the segment, an North first for The business quarter within existing American from primarily American mid wins on revenue revenue retail is new the of of X.X% down prior segment The from of segment a year, adjusted year.

Our reductions impact or to made anticipation due We that XXXX. believe the April of that decreased lower in effect a take wants we're contractor that occurred has decline business. legislation $X.X to in from XX.X%, million clients the negative International U.K., and in in headcount, from resulted rebuilding Staffing segment primarily demand which and

a was segment comparable MSP quarter, experience. an compensation increased XX for year XXXX American X.X% margin from from prior The due government to increase basis from payroll $X.X QX North million Gross year. prior the primarily was and a and wage attributable primarily point up XX.X% the service business. Our claims or improved workers' subsidies demand benefit basis benefit to XX point to is compared in XX%

margin mix primarily due was well Staffing North employee business. segment costs, a these Our increase higher as as related margin American to lower of

of of the costs a offset $X.X the International $X.X decrease India. costs $X.X due from to professional included compared million on loss $X.X a in and the and our quarter. $X.X away incentives volume. million. as business. to estate to of a initiative basis to to was segment including was compared ongoing $X.X $X.X lower of Staffing number million of year gain. XXXX $XX.X a adjusted $X.X million year year The $X.X second footprint operating to million shift operating in lower increased year-over-year for the quarter first strategic prior improved The due XXXX, our primarily million margins income reductions, of at XXX prior severance actions headcount in due consolidating in of and the lower the to for by to percentage in result costs American million Adjusted segment prior related the $X.X of a payroll operating MSP partially flat million income International is declined rolls labor margin an a Staffing Restructuring the operations service. to remained mentioned. income and quarter to was costs for The impaired costs points the $X.X North adjusted decreased Our million related to ago. Bangalore, gross increase our $X.X severance primarily MSP expense facility and termination compared SG&A in previously primarily American year cost higher offshore offset QX improvement American of XXXX half cost lease million million by strategic Staffing million million North fees. increased to sales a significant in related revenue loss due Operating quarter. charges $XX.X real North lower in comparable in million million, $X.X quarter million facilities included $X.X to fiscal

restructuring $X.XX lower or a we net comparable million negative $X.X expenses reported This the prior share, to compared loss strategic as per well quarter. a to $X.X Adjusted prior and in in XXXX primarily $X.X related per the of XXXX, the QX $X.XX a share comparable was as of QX year to reduction a loss improvement for as non-operating or in due cost costs. EBITDA operating For severance and GAAP year to improved million positive XX.X% to by initiatives $X.X million compared million expenses million quarter. $XX.X

in Moving equivalents restricted flow prior $XX.X prior additional 'XX, balance million with in decrease an cash million combined investments, on to short-term cash and of million of and the increase and a year cash $X.X from QX end At had in quarter. million few sheet. we the the key and from $XX.X items an $XX.X the

receivable quarter, same as remained flow cash long-term million the operations $XX.X as to X% result increase $XX fiscal total in total the at of increased -- expenditures $X to we million last $X.X XXXX availability expect slightly to quarter million of Our from million towards improve in in the year. liquidity with accounts quarter over January. a use October We from second million and last in available $XX revenue first capital debt of the X% Looking in

in We are continue. line to margin which expect year's, anticipated to last in percent impacted with QX gross margin be gross the factors

the momentum, performance improvements Xx SG&A representing over adjustment, the fiscal year, operating coming encouraged quarter. positive year realized. with quarter of the favorable a of a should call XXXX. $XX to back XX to in out first reduction on EBITDA substantial to solid from basis we a remain XXXX. turn achieve Xx in a be a we trajectory with income, trends last back us I to adjustment still Linda? to Overall, our $XX million creates the We growth improvement the Linda. continue over reminder, confident to range, are the to significant the million than prior profitability now typically higher workers' projected opportunity are a I'll which comp difficult As point year. to in a revenue expense had return represents coupled and for prior XXXX Linda with This due

Linda Perneau

Herb. you, Thank

that and labor dedicated field to Our QX in activity, increased the improving confidence combination strong of clients by when delivered are entire buying which enforced distribution, organization all X vaccine steps sequential expertly sizes, QX our International, Despite continues and Volt have improvement of to protocols taken in addition trends, of adjusted of years. XXXX. and safety X.X% year. results American growth comparing varying up improvements, build notable both above last employees had is and work the show course, over to improvement of economic QX colleague and the Of strong hard who This MSP Staffing resilience XXXX day continue units, of been the revenue segment globally. growing every over Staffing, per Volt revenue American represent across upon North business North mentioned and to also the the had Daily, headwinds, each performance American and North most prior

Our front. typically retail midsized the This network continues progress local demonstrate to small clients. on branch promising to with

expanded to in We markets earnings markets last growth, invest have since of our to multiple fuel Southeast. a and in couple call the continue in

colleague remains on of in development training each the area. focus Our and ongoing this

and virtual As expect model with and future against positively around performance. conduct responded we Hire pleased in dynamic camp individual that our continue am expand discipline this to the the I specific opportunities, teams to to required training have continue and Direct to how coaching boot impact and executed

food the large call side, see of to buying On distribution. increased continue client enterprise the and specifically manufacturing, in we areas activity, logistics center,

about expansion we as are business and as winning encouraged healthy opportunities potential. units, future leaving logos, me pipeline, have win teams on Our across well capitalizing new all

accelerate source our quality talent performance. large invest to continue to continue branch and mid top both will network to to team We to we to sales add account and line

talent the been pre-COVID technology chatbot and order has with progress above leveraging and have assist XXXX, to well case Last candidate we made attraction, volume quarter, engagement. supply. since screening constrained volume despite July As remains the placement discussed we timeframe,

across completed second select our the of within organization. As Staffing have was planned, we clients usage North phase expansion of American

Our candidate enhancing planned more our and the clients meeting next the to of as focus the on end expansion candidate experience, March, increasing of and is effectively. for we pipeline continue demands quickly

opportunities, explore continue We to designed additional candidate to developing leverage up provide development to commitment the talent to our technology only technology and the enhance platform and will current our the workforce skilling future. not also experience, demonstrating but and of

We continue as we progress. details more to share will

limited result the initial decline to as solutions segment in continues workforce last outsourced buying looking segment new This early providing wins clients activity sourcing, MSP Our engaging slowed slight by was sales impacted talent of year. to an contingent extensively March, two recovery a clients, managing large for approach demonstrate the impact. to total and from the pandemic and of throughout

gradually in months. last reported, the [ph] we has several have As activity improved RSP

sales these occur. cycles, uplift Although when wins margin generate long generally significant but are new

are strong a coupled with for scalable experience smaller and to solutions and the agility with team more We complex globally. to flexibility fortunate programs tenured have extensive offer

Our partnership unprecedented remain outlook for our segment. solution is testament MSP in client We confident and provide. this the teams tenure outstanding to promising a a program

in In Herb. headwinds the higher ongoing segment should the front, and U.K. I concur is and the end for to population previously improvement outlook are to On despite also beginning lockdowns the gain international referenced, summary, with percentage incremental as remains realize this vaccinated. of momentum specifically a continue promising we The

continue and the us to leaves profitability the in quarter growth return poised projected well XXXX. to and performance Our fiscal in throughout trajectory the first pandemic

call questions, Before over I I extend Volt around the to world. turn heartfelt the would colleagues for to our like my appreciation

like work essential provide to of of and and They clients, with new enabling Our continued teams have the opportunities, completed. Volt's employment way impactful reacted be to ensure the embrace mind. solutions excel. capital to operating, motivation been career who of Directors and valued Board swiftly, of field us safety who field to interest relentlessly I to and choices, our to on, head their secure our service support course, shareholders all us gives our to thank continue trust trust business and our working employees clients, their new us the workforce whose challenges in partner, also be would best have our with necessary superior employees

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

Operator

Sidoti from Vogel Instructions] Company. [Operator comes And with Please question proceed. Josh first our &

Josh Vogel

Thank Good Linda doing you. afternoon, Hope both Herb. and you well.

Herbert Mueller

Josh. great. Thanks, Doing

Josh Vogel

results point, out questions revenue. of step to similar coming I base couple first in Good on guess and for Certainly I here. Great. down really a of you had a fiscal impressive year-over-year XXXX. SG&A impressive hear. obviously fairly the

So come fees, think costs, professional when and as at we is look think back when you volume labor year facility what about do savings permanent you up? picks the may what this

Herbert Mueller

we the had Well, are reductions permanent. that

into However, as we able on top before, we opportunity and force start bringing line, will back growing see as be that. our we've really capitalize sales additional mentioned people we to adding as be to

doing I certainly opportunity we'll fair to amount on there sales think some more support we've room what of there's out side, to sure in I bring in of field. that take revenue and office not think additional a our got make the have we advantage back on but revenue, support can that to we're the

Josh Vogel

actually next That of kind helpful. my leads into question. That's

to I around the -- meaningfully I think a add and much U.S. bench you recruiter revenue is capacity? [indiscernible] you in just last you left was have your like, current call, there the How the I that think, have quantify existing employee increased, on before per third headcount? thoughts any

Linda Perneau

right. that so -- We one, it I'll pick varies, Josh. Yes,

specific area may varies metric be location, location. look metric a upon one any what depending our folks that It's what particular We measure dynamic a to, look the that happening the are we it country, So that answer in productivity, at that of the at regularly. really to it's we incentivized.

make us. and level it's as a our and cannot, new site, as pick we're So glass ceiling, see metric We're teams we simply making of very we we're very investments new win the cannot important And certain know approaching, for quick grow. investment, business, when in productivity hit buying activity to seeing clients that up. just a they expand we as that win lot on we a an And right?

-- those lower, might bandwidth, we might still of other really or more are be and startup area where productivity areas, looking an in have leverage. we're to levels be So significant just then a branch, where

it to but technology do, What varies, leverage additional So cost look will savings. cost we it something and closely. Herb's monitor certainly we opportunities, is that point as is identify to continue we very for savings

some continue by to that be growth. that fuel And make investments will to will of the offset

Josh Vogel

things. That last the one, makes sense. I of cost And one guess, side about

around more office, many general Just see back things you to move in how potential comments are funds and the there? how over opportunities India, going any

Herbert Mueller

are Josh, that very We've been the pleased going made we've progress extremely there. well. I now things very, think with right

pulled that in accounting it QX done, to in was quickly, as there. got went very cleanest we QX gotten continue a through very, an We with have people fair through, accounting was situation, got our audits the has December, up well. had we've situation of We any team service one quickly. and of metrics haven't performance, really from went amount just they worked a we've had dealt speed, support out, last, extremely year-end come that we've have pleased. and few and just had, and excellent. audit you And been Our We've We've very and side. their on shared to

So pleased. we're very

that certainly is opens replace to need we we're position make whatever, there have it that do position it case India? for we forward, evaluate. through, that Going a we look, basis. to opportunity not time by Does up case or or an and by here, attrition in sense any continuing we're that Or handling do to us

Josh Vogel

Sure.

to about easy adjusted And have know think I around when X.X% the would great. wins [technical difficulty] a you COVID the for just new America, year, Okay, basis, what but see revenue it's to how now, an when quarter, then existing saw the I North I in quantify, up increase this if million the about to last quite don't client what looked that results, without And in and put on we he much curious, think we thing $XXX like and expansion related in what clients. from number did versus quarter? think came growth impact, was on with because was you

Linda Perneau

So last what that year makes of even was quarter X.X% is the first Josh, this mind, in exciting, keep pre-pandemic. more is

American timeframe. So North managed to these these teams in in results pre-pandemic staffing deliver a

Josh Vogel

you also to weeks you be around Even impressive, course. -- heard first said, up seven quarter. the QX QX for of expect commentary right, because If okay, X% give In year-over-year. that your Yes, I X% great. of you revenue to Herb

maybe have so give you And like? that then didn't that. growth sense of the a in -- storms that If you we can winter the built that, are what drag from look would

Herbert Mueller

impact from supply had Tennessee, Texas is in still Yes, occurred, we're we in clients some were especially And long, a week seeing down. interruption. initial for Texas, that chain the that then thing shutdown, literally especially that, the because other and the had and where you

the but because supply not little by of disrupted. saw quickly, end in it keep on a that that affected and getting [indiscernible] bit things had you've Midwest, rot. Texas in kind part the that of the see storms, So a had could up, before range, making the were bit hit, not do -- mind, overall, If and little the been we're but that of from in only that. horrendous, weather still Tennessee, just better, but that And has we storm indirectly Northeast, seeing, ice other that's Denver, and but also we they you low hasn't the bad got hit we it you'll big really And recover got been us you've the quickly, ice also cutbacks doesn't chain of states actually was range. impact that get rebounds couldn't if

closely, So more potentially, X% wood, [ph] but something watching that an X% now we're is knock that's there's right that. something impact to than but -- there not much

Josh Vogel

can to I weather the [indiscernible]. some Okay. certainly But lousy Northeast. attest in This

one one, will in I queue. last the Just back hop

retail that low what's much how case? is they thinking a the XX%, your America, target mid And progresses? market, do at still Just for mid lows, as market about up? was make it North I business retail logos running

Herbert Mueller

Yes.

came So we same -- We basically it well. enterprise in rate. increase, did but that at the as had businesses so did

So those, but see we'll we pleased long-term. We'd it's our going, how it'll and of kind to basis us. both it's were with there, priority a a we'll mix, probably continue still to love we for certainly XX% step have get be -- as fast of can emphasis that high of be

Josh Vogel

All right, how looking Well, thanks out. taking forward plays the to for year questions my seeing great. and

Herbert Mueller

Josh. Thanks, Right.

Linda Perneau

Thanks, Josh.

Operator

from [Operator Instructions] Mike with Hughes question And our SGF is next Capital.

Michael Hughes

and taking afternoon, my for Good thanks questions.

to just The factors? outline there and kind question you mix, front EBITDA first X% balance? can to the you Hire get one payroll is, have as MSP then and goal? far the of a on is, other What second happen retail maybe the do Direct And deferred the needs as

Herbert Mueller

due the be far shown X% just multiple a the as following components better payroll And pricing, Sure. a under us at XXXX. $XX then then growth now. year. of on of mixers, million under for million, our due just other that: existing the one, and currently XX% cost that's be control. half Direct got to And margins that liability. end striving of this Mike, the as the now the well business then, in into end year, will as that business of our we get that of retail of priority as do of $XX better and of and that another is continuing about as December that to what talked going just we -- a just And pricing you've Hire, to better as is of tax, on get ultimately will overall third a major key and then And new leg current million hair in the business it's through which $XX hair the deferred our that

Michael Hughes

Okay. And that? if you put on timeframe a

Unidentified Company Representative

that really by looking of 'XX. at end Yes, the so FY

Michael Hughes

Okay. margin quarter I just Could you And you one for what on commentary your the apologize, April front? repeat gross that the around then other. said

Herbert Mueller

improvement, basis us again, workers' We to we and get very up. XX out basis similar typically compared our to last unusually points. to on was workers' year XX underlying year, actually be we point expect beat because a And That had one-time, I comp, threw just which improvement that's high, really last it implying it last year's, XX estimate.

come hit So, and indicate really fundamentals up still some underlying trying number, and to year's the last gross of improvement which in will some margin.

Michael Hughes

last I Okay. that I from $X.X that's, was mean, benefited million think you've year. it

that's So big hurdle to going a that you're overcome.

of So Hire? is that core kind primarily that from Direct Or drive what's to expansion? going

Herbert Mueller

do our have that, workers' no comp, mix then we in. certainly to of potentially also retail -- to overall that close subsidies And combination to a wage Hire $XXX,XXX things some They're and our on to embedded business. business we could improvement wage on that still that maybe benefit $XXX,XXX. come in of government expect half additional with so is of subsidies, top other Yes, see Direct

a of variety just there's into components will that So come that.

Michael Hughes

very you Thank much. great. Okay, it. Appreciate

Herbert Mueller

You're welcome.

Herbert Mueller

Thanks, Mike.

Operator

Ladies and the closing call for to the gentlemen, remarks. end we question-and-answer reached I'd Perneau like have the and Linda you. Thank over to session, back of turn

Linda Perneau

Thanks, and call, your in Omar. in participation Thank for your you Volt. today's interest continued for

XX. holding you speaking reminder, We we in fiscal with April to when you. second annual on shareholder look a forward our are we report again June As XXXX meeting virtually quarter our results. Thank

Operator

concludes Thank you tonight's conference. This all. web

Thank this evening. at for you participation your lines your disconnect may and a time. You great have

Volt Information Sciences (VOLT) 16 Mar 212021 Q1 Earnings call transcript