Reports Year-Over-Year Revenue Growth and
Improved Operating Results
Volt Information Sciences, Inc. (“Volt” or the “Company”)
(NYSE-AMERICAN: VOLT) a global provider of staffing services, today
announced financial results for the first quarter ended January 31,
2021.
First Quarter Summary
- Revenue was $218.0 million, compared to $217.8 million in the
first quarter of fiscal 2020; Adjusted Revenue* increased
0.4%.
- Gross margin was 15.0%, a 60-basis point increase compared to
the prior-year quarter.
- GAAP operating loss for the quarter was ($1.7) million, a $7.6
million improvement compared to the prior-year quarter; Adjusted
Operating Loss*, excluding impairment and restructuring charges,
improved by $7.0 million year over year to ($1.1) million.
- GAAP EPS loss was ($0.11) per share compared to ($0.50) per
share in the first quarter of fiscal 2020; Adjusted EPS* was
($0.08).
- Adjusted EBITDA* increased $6.5 million year over year to $0.9
million.
* Adjusted Revenue, Adjusted Operating Income (Loss), Adjusted
EPS and Adjusted EBITDA are Non-GAAP measures described and defined
below.
“I am very encouraged by our results to start fiscal 2021, which
were made possible through a combination of our continued response
to COVID-19 and the resiliency we showed in managing our business.
Our ongoing recovery is directly attributable to the never-ending
hard work and dedication of all Volt employees, who continue to
adapt and provide industry-leading service to our clients,” said
Linda Perneau, President and Chief Executive Officer. “Despite
ongoing business disruption from the pandemic, we posted
year-over-year Revenue and Adjusted EBITDA growth compared to our
first quarter in fiscal 2020, a pre-pandemic quarter. We also
reported our third consecutive quarter of positive Adjusted
EBITDA.”
First Quarter Results
North American Staffing revenue for the quarter was $184.2
million, as compared to $182.4 million for the first quarter of
fiscal 2020. Adjusted Revenue, which is a Non-GAAP measure, for
this segment increased approximately 2.2 percent year over year.
The increase is primarily attributable to business wins with new
clients and expansion of business within existing clients.
International Staffing revenue for the quarter was $24.0
million, compared to $26.2 million in the prior-year quarter.
Adjusted Revenue decreased 12.9 percent year over year. The
decrease is primarily due to the results within our U.K.
business.
North American MSP revenue for the first quarter was $9.7
million, compared to $9.4 million in the prior-year quarter. The
increase is primarily attributable to increased demand in its
payroll service business.
Gross margin for the quarter was 15.0 percent of revenue, a 60
basis-point increase from the first quarter of fiscal 2020. The
increase is primarily attributable to improved margins in our North
American and International Staffing segments.
SG&A expense for the first quarter was $33.7 million, a $5.8
million reduction from the prior-year quarter. The reduction is
primarily attributable to lower labor and related expenses,
facility costs and professional fees.
Adjusted EBITDA, which is a Non-GAAP measure, was $0.9 million
for the first quarter of fiscal 2021, compared to ($5.6) million in
the prior-year quarter.
“Our results demonstrate the effectiveness of the strategic
actions we’ve taken over the past two years. We are now positioned
to achieve even greater success going forward, accelerating our
growth and profitability,” commented Ms. Perneau. “Although we
experienced widespread shutdowns due to last month’s winter storms,
and the prior-year quarter includes seven weeks that were
unaffected by COVID-related shutdowns, we expect to report
sequential and year-over-year improvement in our operating results
for the second quarter.”
2021 Earnings Conference Call and Webcast
Volt Information Sciences, Inc. will conduct a conference call
on Tuesday, March 16, 2021, at 5:00 p.m. Eastern Time, to review
the financial results for the first quarter ended January 31, 2021.
A presentation supplementing the call can be accessed through the
investor relations portion of the website. Investors interested in
participating on the live call can dial 1-877-407-9039 within the
U.S. or 1-201-689-8470 from abroad. The conference call, which may
include forward-looking statements, is also being webcast and will
be available via the investor relations section of the Company’s
website at www.volt.com. A replay of the webcast will be archived
on Volt’s investor relations website for 90 days.
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to a number of known and unknown risks. Such risks include,
among others, general economic, competitive and other business
conditions (including the potential impact of the strain of
coronavirus known as COVID-19 on our operations as well as the
operations of our customers), the degree and timing of customer
utilization and renewal rate for 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 the “Risk Factors” and
other sections of the Company reports filed with the Securities and
Exchange Commission (“SEC”). You are cautioned not to place undue
reliance on such statements and to consult our SEC filings for
additional risks and uncertainties that may apply to our business
and the ownership of our securities. Our forward-looking statements
are presented as of the date made, and we disclaim any duty to
update such statements unless required by law to do so.
Note Regarding the Use of Non-GAAP Financial Measures
The Company has provided certain Non-GAAP financial information,
including Adjusted Revenue, Adjusted Operating Income (Loss),
Adjusted EPS and Adjusted EBITDA, which include adjustments to our
GAAP financial results. 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,
including on a constant currency basis and eliminating (a) the
impact of businesses sold or exited, (b) the impact from the
migration of certain clients from a traditional staffing model to a
managed service model and (c) 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 without the effect of currency fluctuations, special items
or the impact of businesses sold or exited 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 income or expenses
which the Company does not consider indicative of the current and
future period performance and are more fully disclosed in the
tables.
Adjusted Revenue is defined as revenue excluding businesses
exited and the effect of foreign currency translation. The Company
has also migrated certain clients from a traditional staffing model
to a managed service model, resulting in the Company now managing a
greater percentage of such clients’ business under its North
American MSP. This shift provides increased opportunity for the
Company with the relevant clients. However, due to the structure of
MSP arrangements, revenue is recognized on a net basis, thereby
reducing revenues on a comparative period basis. Beginning in the
first quarter of 2020, the Company includes such delivery model
shifts within the Adjusted Revenue measurement, as it provides a
more comparable basis for evaluating performance results from
period to period and reflects the method used by management to
evaluate performance. A reconciliation is shown in the tables at
the end of this press release.
Adjusted EBITDA is defined as earnings or loss 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 measure 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.
Adjusted Operating Income (Loss) is defined as operating income
(loss) excluding businesses exited.
The Company believes the presentation of Adjusted Operating
Income (Loss) is relevant and useful for investors because it
provides a more comparable basis to evaluate performance results
and analyze trends from period to period in a manner similar to the
method used by management.
Adjusted EPS is defined as earnings per share excluding
impairment and restructuring charges. The Company believes that the
presentation of Adjusted EPS is useful for investors since it
removes certain special items which the Company does not consider
indicative of the current and future period performance.
The Company’s computation of Adjusted Revenue, Adjusted EBITDA,
Adjusted Operating Income (Loss) and Adjusted EPS 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.
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). Our staffing services consist of workforce
solutions that include providing contingent workers, personnel
recruitment services and managed staffing services programs
supporting primarily administrative, technical, information
technology, light-industrial and engineering positions. Our managed
staffing programs involve managing the procurement and on-boarding
of contingent workers from multiple providers. 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.
Investor Relations Contacts: Volt Information Sciences,
Inc. voltinvest@volt.com
Joe Noyons Three Part Advisors jnoyons@threepa.com
817-778-8424
Financial Tables Follow
Results of Operations (in thousands, except per
share data)
Three Months Ended
January 31, 2021
November 1, 2020
February 2, 2020
Net revenue
$
217,958
$
211,073
$
217,766
Cost of services
185,276
176,844
186,339
Gross margin
32,682
34,229
31,427
Selling, administrative and other operating costs
33,747
30,735
39,497
Restructuring and severance costs
632
438
1,246
Impairment charges
31
14,518
11
Operating loss
(1,728
)
(11,462
)
(9,327
)
Interest income (expense), net
(477
)
(431
)
(700
)
Foreign exchange gain (loss), net
242
(62
)
(328
)
Other income (expense), net
(156
)
(291
)
(258
)
Loss before income taxes
(2,119
)
(12,246
)
(10,613
)
Income tax provision
327
271
195
Net loss
$
(2,446
)
$
(12,517
)
$
(10,808
)
Per share data: Basic: Net loss
$
(0.11
)
$
(0.58
)
$
(0.50
)
Weighted average number of shares
21,793
21,607
21,416
Diluted: Net loss
$
(0.11
)
$
(0.58
)
$
(0.50
)
Weighted average number of shares
21,793
21,607
21,416
Segment data: Net revenue: North
American Staffing
$
184,216
$
178,603
$
182,395
International Staffing
24,013
23,033
26,223
North American MSP
9,669
9,365
9,369
Corporate and Other
119
135
203
Eliminations
(59
)
(63
)
(424
)
Net revenue
$
217,958
$
211,073
$
217,766
Operating income (loss): North American Staffing
$
6,175
$
8,956
$
99
International Staffing
382
278
374
North American MSP
532
885
754
Corporate and Other
(8,817
)
(21,581
)
(10,554
)
Operating income (loss)
$
(1,728
)
$
(11,462
)
$
(9,327
)
Work days
59
64
59
Condensed Consolidated Statements of Cash
Flows (in thousands)
Three Months ended
January 31, 2021
February 2, 2020
Cash, cash equivalents and restricted cash beginning of
the period
$
56,433
$
38,444
Cash used in all other operating activities
2,392
(6,081
)
Changes in operating assets and liabilities
(8,891
)
6,114
Net cash (used in) provided by operating activities
(6,499
)
33
Purchases of property, equipment, and software
(959
)
(1,370
)
Net cash provided by (used in) all other investing activities
(4
)
336
Net cash used in investing activities
(963
)
(1,034
)
Debt issuance costs
(161
)
(230
)
Net cash used in all other financing activities
(5
)
(6
)
Net cash used in financing activities
(166
)
(236
)
Effect of exchange rate changes on cash, cash equivalents
and restricted cash
(13
)
(565
)
Net decrease in cash, cash equivalents and restricted
cash
(7,641
)
(1,802
)
Cash, cash equivalents and restricted cash end of the
period
$
48,792
$
36,642
Cash paid during the period: Interest
$
484
$
730
Income taxes
$
8
$
4
Reconciliation of cash, cash equivalents and restricted
cash end of the period: Current Assets: Cash and cash
equivalents
$
40,062
$
30,876
Restricted cash included in Restricted cash and short term
investments
8,730
5,766
Cash, cash equivalents and restricted cash, at end of period
$
48,792
$
36,642
Condensed Consolidated Balance Sheets (in
thousands, except share amounts)
January 31, 2021
November 1, 2020
ASSETS CURRENT ASSETS: Cash and cash equivalents
$
40,062
$
38,550
Restricted cash and short-term investments
11,876
20,736
Trade accounts receivable, net of allowances of $157 and $219,
respectively
129,907
121,916
Other current assets
6,152
7,058
TOTAL CURRENT ASSETS
187,997
188,260
Property, equipment and software, net
21,438
22,167
Right of use assets - operating leases
24,772
25,107
Other assets, excluding current portion
6,654
6,311
TOTAL ASSETS
$
240,861
$
241,845
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accrued compensation
$
18,957
$
18,357
Accounts payable
25,733
31,221
Accrued taxes other than income taxes
26,584
12,983
Accrued insurance and other
16,891
15,908
Operating lease liabilities
7,201
7,144
Income taxes payable
630
891
TOTAL CURRENT LIABILITIES
95,996
86,504
Accrued insurance and other, excluding current portion
22,278
29,988
Operating lease liabilities, excluding current portion
36,836
38,232
Income taxes payable, excluding current portion
90
90
Deferred income taxes
-
3
Long-term debt
59,081
59,154
TOTAL LIABILITIES
214,281
213,971
Commitments and contingencies
STOCKHOLDERS'
EQUITY Preferred stock, par value $1.00; Authorized - 500,000
shares; Issued - none
-
-
Common stock, par value $0.10; Authorized - 120,000,000 shares;
Issued - 23,738,003 shares; Outstanding - 21,736,575 and 21,729,400
shares, respectively
2,374
2,374
Paid-in capital
80,142
79,937
Accumulated deficit
(32,384
)
(29,793
)
Accumulated other comprehensive loss
(5,527
)
(6,458
)
Treasury stock, at cost; 2,001,428 and 2,008,603 shares,
respectively
(18,025
)
(18,186
)
TOTAL STOCKHOLDERS' EQUITY
26,580
27,874
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
240,861
$
241,845
GAAP to Non-GAAP
Reconciliations
(in thousands)
Three Months Ended
January 31, 2021
February 2, 2020
Reconciliation of GAAP net
loss to Non-GAAP net loss:
GAAP net loss
$
(2,446
)
$
(10,808
)
Restructuring and severance
costs
632
(a)
1,246
(b)
Impairment Costs
31
11
Non-GAAP net loss
$
(1,783
)
$
(9,551
)
Three Months Ended January 31, 2021
February 2, 2020
Reconciliation of GAAP net
loss to Adjusted EBITDA:
GAAP net loss
$
(2,446
)
$
(10,808
)
Restructuring and severance
costs
632
(a)
1,246
(b)
Impairment Costs
31
11
Depreciation and amortization
1,705
1,973
Share-based compensation
expense
226
511
Total other (income) expense,
net
391
1,286
Provision (benefit) for income
taxes
327
195
Adjusted EBITDA
$
866
$
(5,586
)
Special item adjustments consist of the following:
(a) Relates to actions taken by the Company as part of its
continued efforts to reduce costs and on-going costs related to
facilities impaired in the second half of fiscal 2020, net of a
lease termination gain. (b) Primarily relates to the strategic
initiative costs to offshore a significant number of identified
roles to our staffing operations in Bangalore, India.
GAAP to Non-GAAP
Reconciliations
(in thousands)
Three Months Ended January 31,
2021
Three Months Ended February 2,
2020
As Reported
As Reported
FX Impact
MSP Delivery Model
Shift
Adjusted
Revenue North American Staffing
$
184,216
$
182,395
$
-
$
(2,072
)
$
180,323
International Staffing
24,013
26,223
1,355
-
27,578
North American MSP
9,669
9,369
-
52
9,421
Corporate and Other
119
203
-
-
203
Eliminations
(59
)
(424
)
-
-
(424
)
Total Revenue
$
217,958
$
217,766
$
1,355
$
(2,020
)
$
217,101
% change
0.4
%
GAAP to Non-GAAP
Reconciliations
(in thousands)
Three Months Ended January 31,
2021
Three Months Ended February 2,
2020
As Reported
As Reported
Business Exited
Adjusted
Operating Income (Loss) North American Staffing
$
6,175
$
99
$
-
$
99
International Staffing
382
374
-
374
North American MSP
532
754
-
754
Corporate and Other
(8,817
)
(10,554
)
32
(10,522
)
Total Operating Income (Loss)
$
(1,728
)
$
(9,327
)
$
32
$
(9,295
)
GAAP to Non-GAAP
Reconciliations
(in thousands)
Three Months Ended January 31,
2021
Three months ended February 2,
2020
As Reported
As Reported
Business Exited
Adjusted
Operating Loss Gross Margin
$
32,682
$
31,427
$
-
$
31,427
Selling, administrative and other operating costs
33,747
39,497
-
39,497
Restructuring and severance costs
632
1,246
(32
)
1,214
Impairment charges
31
11
-
11
Total Operating Loss
$
(1,728
)
$
(9,327
)
$
32
$
(9,295
)
GAAP to Non-GAAP
Reconciliations
(in thousands, except per
share data)
Three Months Ended January 31,
2021
As Reported
Restructuring and Impairment
Costs
Adjusted
Earnings per Share Net loss
$
(2,446
)
$
663
$
(1,783
)
Per share data: Basic: Net loss
$
(0.11
)
$
(0.08
)
Weighted average number of shares
21,793
21,793
Diluted Net loss
$
(0.11
)
$
(0.08
)
Weighted average number of shares
21,793
21,793
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210316006014/en/
Investor Relations Contacts: Volt Information Sciences,
Inc. voltinvest@volt.com Joe Noyons Three Part Advisors
jnoyons@threepa.com 817-778-8424
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