Volt Information Sciences, Inc. ("Volt" or "the Company") (NYSE-MKT:
VISI), a global provider of staffing services and information
technology infrastructure services, today reported results for its
fourth quarter and full year ended October 30, 2016. Key elements
Commenting on Volt's fourth quarter performance, Michael Dean, President
and CEO, said, "We concluded fiscal 2016 with a solid fourth quarter
highlighted by strong year-over-year growth in gross margin percentage
along with careful expense management that helped produce the most
profitable quarter for Volt in five years. In addition, we continued to
add to our book of business with several significant new customer
engagements. This, coupled with a slower rate of revenue decline from
existing customers, is helping to stabilize revenue from our core North
American Staffing business."
Mr. Dean continued, "As we head into fiscal 2017 as a financially
stronger and more streamlined company, I am confident we will continue
to build on the foundational strengths of our core staffing business to
achieve our longer-term goal of sustained profitable growth."
Fiscal 2016 Fourth Quarter Results
Total revenue for the fiscal 2016 fourth quarter was $341.6 million, up
$11.0 million or 3.3%, compared to total revenue of $330.6 million in
the third quarter of fiscal 2016. Compared to the prior year period,
total revenue decreased $22.4 million, or 6.2%, compared to $364.0
million in the fourth quarter of fiscal 2015.
North American Staffing revenue, which provides a broad spectrum of
contingent staffing, direct placement, recruitment process outsourcing
and other employment services, was $270.6 million, a $7.6 million or
2.9% increase compared to $263.0 million in the third quarter of fiscal
2016. Compared to the prior year period, North American Staffing
revenues declined $5.6 million, or 2.0%, compared to North American
Staffing revenue of $276.2 million in the fourth quarter of fiscal 2015.
International Staffing revenue, which includes the Company's contingent
staffing, direct placement and managed programs businesses in Europe and
Asia, was $31.7 million, down $0.9 million or 2.6%, compared to $32.6
million in the prior quarter. International Staffing revenues declined
$5.9 million, or 15.6%, from the fourth quarter of fiscal 2015.
Technology Outsourcing Services and Solutions revenue, which provides
quality assurance, business intelligence and analytics and customer
service support for companies in a variety of industries, was $30.5
million, up $6.7 million or 28.0% from $23.9 million in the prior
quarter. Technology Outsourcing Services and Solutions revenue declined
$2.6 million, or 7.8%, compared to $33.1 million in the prior year
Corporate and Other revenue, which primarily consists of the Company's
North American managed service business and information technology
infrastructure business was $27.6 million, up $0.4 million or 1.3%,
compared to $27.2 million in the prior quarter. Corporate and Other
revenue declined $10.1 million, or 26.9%, compared to $37.7 million in
the fourth quarter of 2015.
Net income of $2.8 million in the fourth quarter of fiscal 2016 included
$1.5 million of restructuring and severance costs and impairment
charges, partially offset by $0.5 million related to the amortization of
the gain on the sale of real estate. Excluding the impact of these
special items, net income for the fourth quarter of 2016 would have been
$3.8 million on a Non-GAAP basis.
Adjusted EBITDA, which is also a Non-GAAP measure, was $8.0 million in
the fiscal 2016 fourth quarter. Adjusted EBITDA excludes the impact of
interest expense, income tax expense, depreciation and amortization
expense, other income/loss and share-based compensation expense. For a
reconciliation of the GAAP and Non-GAAP financial results, please see
the tables at the end of this press release.
Fiscal 2016 Full Year Results
Total revenue for the full year of fiscal 2016 was $1,334.7 million,
down $162.2 million, or 10.8%, compared to total revenue of $1,496.9
million for the full year of fiscal 2015.
North American Staffing revenue was $1,047.9 million, down $79.4 million
or 7.0%, compared to $1,127.3 million for the full year of fiscal 2016.
International Staffing revenue was $131.5 million, down $16.1 million or
10.9%, from $147.6 million in the prior year period.
Technology Outsourcing Services and Solutions revenue was $106.6
million, down $29.3 million or 21.6%, from $135.9 million for the full
year of fiscal 2015. Corporate and Other revenue was $114.8 million,
down $53.6 million or 31.9%, from $168.4 million in the prior year
Loss from continuing operations in fiscal 2016 of $14.6 million included
$6.1 million of restructuring and severance costs and impairment charges
as well as $1.0 million of consulting and professional fees, partially
offset by $2.9 million related to the gain on the sale of real estate.
Excluding these items, the loss from continuing operations in 2016 would
have been $10.4 million on a Non-GAAP basis.
Subsequent to the end of the fourth quarter, the Company amended its
$160.0 million Financing Program with PNC to extend the Program by one
year to January 31, 2018. The amendment revised the existing minimum
liquidity level from $35 million to $20 million with a step-up to $25.0
million at the earlier of, 1) the sale of Maintech, Inc., or 2) receipt
of the IRS tax refund. The amendment also established a new performance
based covenant which includes an EBIT requirement.
As of October 30, 2016, the Company had $48.5 million of global
liquidity for working capital requirements as compared to $49.4 million
in the prior year period.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal 2016
fourth quarter financial results will be held today at 4:30 p.m. Eastern
Time / 1:30 p.m. Pacific Time. Volt's President and CEO Michael Dean and
CFO Paul Tomkins will host the conference call. Participants can listen
in via webcast by visiting the Investor & Governance section of Volt's
website at www.volt.com.
Please go to the website at least 15 minutes early to register, download
and install any necessary audio software. The conference call can also
be accessed by dialing 877-407-9039 (201-689-8470 for international
callers) and reference the "Volt Information Sciences Earnings
Following the call, an audio replay will be available beginning
Wednesday, January 11, 2017 at 7:30 p.m. Eastern Time through Wednesday,
January 25, 2017 at 11:59 p.m. Eastern Time. To access the replay, dial
844-512-2921 (412-317-6671 for international callers) and enter the
Conference ID # 13651129. A replay of the webcast will also be available
for 90 days upon completion of the call, accessible through the
Company's website at www.volt.com in
the Investors & Governance section.
About Volt Information Sciences, Inc.
Volt Information Sciences, Inc. is a global provider of staffing
services (traditional time and materials-based as well as
project-based), managed service programs, technology outsourcing
services and information technology infrastructure services. Our
staffing services consists of workforce solutions that include providing
contingent workers, personnel recruitment services, and managed services
programs supporting primarily professional administration, technical,
information technology, light-industrial and engineering positions. Our
managed service programs consist of managing the procurement and
on-boarding of contingent workers from multiple providers. Our
technology outsourcing services provide pre and post production
development, testing and customer support to companies in the mobile,
gaming, and technology devices industries. In addition, we provide
information technology infrastructure services which provide server,
storage, network and desktop IT hardware maintenance, data center and
network monitoring and operations. Our complementary businesses offer
customized talent, technology and consulting solutions to a diverse
client base. Volt services global industries including aerospace,
automotive, banking and finance, consumer electronics, information
technology, insurance, life sciences, manufacturing, media and
entertainment, pharmaceutical, software, telecommunications,
transportation, and utilities. For more information, visit www.volt.com.
This press release contains forward-looking statements that are subject
to a number of known and unknown risks, including, among others, general
economic, competitive and other business conditions, the degree and
timing of customer utilization and rate of renewals of contracts with
the Company, and the degree of success of business improvement
initiatives 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 are 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, are
available without charge upon request to Volt Information Sciences,
Inc., 1133 Avenue of the Americas, New York, New York 10036, Attention:
Shareholder Relations, 212-704-7921. 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 & Governance section.
October 20, 2016
November 1, 2015
Relates primarily to stock-based compensation granted to our new
Board of Directors of $1.5 million, costs incurred with responding
to activist shareholders and related Board of Directors search
fees as well as legal and other items.
Relates primarily to capitalized internally developed software,
impairment of net assets in our publishing and printing business
in Uruguay as well as impairment of our Uruguay staffing goodwill.
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain non-GAAP financial information, which
includes adjustments for special items, as additional information for
its consolidated income (loss) from continuing operations, segment
operating income (loss) and Adjusted EBITDA. These measures are not in
accordance with, or an alternative for, generally accepted accounting
principles ("GAAP") and may be different from Non-GAAP measures reported
by other companies.
The Company believes that the presentation of Non-GAAP measures
eliminating special items provides useful information to management and
investors regarding certain financial and business trends relating to
its financial condition and results of operations because they permit
evaluation of the results of the Company's continuing operations without
the effect of special items that management believes make it more
difficult to understand and evaluate the Company's results of
operations. Special items include impairments, restructuring and
severance as well as certain expenses or income not indicative of the
Company's current or future period performance and are more fully
disclosed in the tables.
Adjusted EBITDA is defined as earnings or loss from continuing
operations before interest, income taxes, depreciation and amortization
("EBITDA") adjusted to exclude share-based compensation expense as well
as the special items described above.
Adjusted EBITDA is a performance rather than a cash flow measure. The
Company believes the presentation of Adjusted EBITDA is relevant and
useful for investors because it allows investors to view results in a
manner similar to the method used by management.
Adjusted EBITDA has limitations as an analytical tool and should not be
considered in isolation from, or as a substitute for, analysis of the
Company's results of operations and operating cash flows as reported
under GAAP. For example, Adjusted EBITDA: does not reflect capital
expenditures or contractual commitments; does not reflect changes in, or
cash requirements for, the Company's working capital needs; does not
reflect the interest expense, or the cash requirements necessary to
service the interest payments, on the Company's debt; and does not
reflect cash required to pay income taxes.
The Company's computation of Adjusted EBITDA may not be comparable to
other similarly titled measures computed by other companies because all
companies do not calculate these measures in the same fashion.
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