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Volt Information Sciences (VOLT)

Filed: 15 Jun 21, 4:05pm

Exhibit 99.1

 

Volt Information Sciences, Inc. Reports Second Quarter

Fiscal 2021 Financial Results

 

Reports Year-Over-Year Revenue Growth and Positive Net Income

 

Orange, CA, June 15, 2021 -- (BUSINESS WIRE) -- Volt Information Sciences, Inc. (“Volt” or the “Company”) (NYSE-AMERICAN: VOLT) a global provider of staffing services, today announced financial results for the second quarter ended May 2, 2021.

Second Quarter Summary

·Revenue was $222.1 million, a 7.1% increase compared to the second quarter of fiscal 2020; Adjusted Revenue* increased 5.9%.
·Gross margin increased 80 basis points year-over-year to 16.4%.
·GAAP operating income was $2.7 million, a $7.1 million improvement compared to the prior-year quarter; Adjusted Operating Income*, excluding impairment and restructuring charges, was $3.5 million.
·GAAP EPS was $0.08 per diluted share compared to a loss of ($0.25) per share in the second quarter of fiscal 2020; Adjusted EPS* was $0.12 per diluted share.
·Adjusted EBITDA* increased $7.4 million year over year to $6.0 million.

* Adjusted Revenue, Adjusted Operating Income (Loss), Adjusted EPS and Adjusted EBITDA are Non-GAAP measures described and defined below.

“I remain encouraged by our continued momentum and performance this quarter. Despite experiencing significant weather-related impacts in February of this year and the first seven weeks of operations in the prior-year quarter being pre-COVID, we reported sequential and year-over-year improvement in our operating results,” said Linda Perneau, President and Chief Executive Officer. “Thanks to the continued execution of our improved sales and delivery model, and our disciplined cost management, this quarter reflects our strongest year-over-year revenue growth in a decade, and our first positive GAAP net income in 14 quarters.”

Second Quarter Results

North American Staffing revenue for the quarter was $184.3 million, as compared to $173.4 million for the second quarter of fiscal 2020. Revenue for this segment increased approximately 6.3 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 $27.9 million, compared to $24.3 million in the prior-year quarter. Adjusted Revenue increased 4.3 percent year-over-year. The increase is primarily due to increased managed service business and direct hire revenue in the United Kingdom and staffing business in France.

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North American MSP revenue for the second quarter was $9.8 million, compared to $9.7 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 16.4 percent of revenue, an 80 basis-point increase from the second 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 second quarter was $33.0 million, a $3.2 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 $6.0 million for the second quarter of fiscal 2021, compared to ($1.4) million in the prior-year quarter.

“Although the pandemic continues to present a number of challenges across our business, we have emerged as a stronger organization overall,” commented Ms. Perneau. “We remain confident in the continued execution of our strategic initiatives and our ability to remain on the current growth trajectory for fiscal 2021.”

2021 Earnings Conference Call and Webcast

Volt Information Sciences, Inc. will conduct a conference call on Tuesday, June 15, 2021, at 5:00 p.m. Eastern Time, to review the financial results for the second quarter ended May 2, 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 and related government actions 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.

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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.

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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.

 

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Investor Relations Contacts:
Volt Information Sciences, Inc.
voltinvest@volt.com

Joe Noyons
Three Part Advisors
jnoyons@threepa.com

817-778-8424

 

Financial Tables Follow

 

 

 

 

 

 

 

 

 

 

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Results of Operations          
(in thousands, except per share data)    
  Three Months Ended Six Months Ended
  May 2, 2021 January 31, 2021 May 3, 2020 May 2, 2021 May 3, 2020
           
Net revenue $222,092  $217,958  $207,275  $440,050  $425,041 
Cost of services  185,613   185,276   175,038   370,889   361,377 
Gross margin  36,479   32,682   32,237   69,161   63,664 
                     
Selling, administrative and other operating costs  32,950   33,747   36,189   66,697   75,686 
Restructuring and severance costs  595   632   411   1,227   1,657 
Impairment charges  261   31   —     292   11 
Operating income (loss)  2,673   (1,728)  (4,363)  945   (13,690)
                     
Interest income (expense), net  (430)  (477)  (621)  (907)  (1,321)
Foreign exchange gain (loss), net  71   242   (266)  313   (594)
Other income (expense), net  (147)  (156)  (152)  (303)  (410)
Income (loss) before income taxes  2,167   (2,119)  (5,402)  48   (16,015)
Income tax provision  288   327   23   615   218 
Net income (loss) $1,879  $(2,446) $(5,425) $(567) $(16,233)
                     
Per share data:                    
Basic:                    
Net income (loss) $0.09  $(0.11) $(0.25) $(0.03) $(0.76)
Weighted average number of shares  21,793   21,793   21,416   21,793   21,416 
                     
Diluted:                    
Net income (loss) $0.08  $(0.11) $(0.25) $(0.03) $(0.76)
Weighted average number of shares  22,588   21,793   21,416   21,793   21,416 
                     
Segment data:                    
                     
Net revenue:                    
North American Staffing $184,295  $184,216  $173,386  $368,511  $355,781 
International Staffing  27,880   24,013   24,303   51,893   50,526 
North American MSP  9,832   9,669   9,745   19,501   19,114 
Corporate and Other  117   119   187   236   390 
Eliminations  (32)  (59)  (346)  (91)  (770)
Net revenue $222,092  $217,958  $207,275  $440,050  $425,041 
                     
Operating income (loss):                    
North American Staffing $9,471  $6,175  $2,576  $15,646  $2,675 
International Staffing  1,097   382   196   1,479   570 
North American MSP  309   532   491   841   1,245 
Corporate and Other  (8,204)  (8,817)  (7,626)  (17,021)  (18,180)
Operating income (loss) $2,673  $(1,728) $(4,363) $945  $(13,690)
                     
Work days  65   59   65   124   124 

 

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Condensed Consolidated Statements of Cash Flows
(in thousands)
  Six Months Ended
  May 2, 2021 May 3, 2020
     
Cash, cash equivalents and restricted cash beginning of the period $56,433  $38,444 
         
Cash provided by (used in) all other operating activities  9,161   (7,161)
Changes in operating assets and liabilities  (7,349)  10,071 
Net cash provided by operating activities  1,812   2,910 
         
Purchases of property, equipment, and software  (1,755)  (3,092)
Net cash provided by (used in) all other investing activities  (40)  615 
Net cash used in investing activities  (1,795)  (2,477)
         
   Net draw-down of borrowings  —     5,000 
Debt issuance costs  (166)  (243)
Net cash provided by (used in) all other financing activities  23   (6)
Net cash (used in) provided by financing activities  (143)  4,751 
         
Effect of exchange rate changes on cash, cash equivalents and restricted cash  281   (521)
         
Net increase in cash, cash equivalents and restricted cash  155   4,663 
         
Cash, cash equivalents and restricted cash end of the period $56,588  $43,107 
         
Cash paid during the period:        
Interest $917  $1,382 
Income taxes $142  $258 
         
Reconciliation of cash, cash equivalents and restricted cash end of the period:        
Current Assets:        
Cash and cash equivalents $47,231  $26,223 
Restricted cash included in Restricted cash and short term investments  9,357   16,884 
Cash, cash equivalents and restricted cash, at end of period $56,588  $43,107 

 

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Condensed Consolidated Balance Sheets
(in thousands, except share amounts) 
  May 2, 2021 November 1, 2020
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents $47,231  $38,550 
Restricted cash and short-term investments  12,788   20,736 
Trade accounts receivable, net of allowances of $156 and $219, respectively  127,435   121,916 
Other current assets  7,567   7,058 
TOTAL CURRENT ASSETS  195,021   188,260 
Property, equipment and software, net  20,180   22,167 
Right of use assets - operating leases  23,513   25,107 
Other assets, excluding current portion  6,633   6,311 
TOTAL ASSETS $245,347  $241,845 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES:        
Accrued compensation $18,630  $18,357 
Accounts payable  24,793   31,221 
Accrued taxes other than income taxes  31,828   12,983 
Accrued insurance and other  17,710   15,908 
Operating lease liabilities  6,817   7,144 
Income taxes payable  515   891 
TOTAL CURRENT LIABILITIES  100,293   86,504 
Accrued payroll taxes and other, excluding current portion  21,237   29,988 
Operating lease liabilities, excluding current portion  35,424   38,232 
Income taxes payable, excluding current portion  90   90 
Deferred income taxes  —     3 
Long-term debt  59,153   59,154 
TOTAL LIABILITIES  216,197   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  80,673   79,937 
Accumulated deficit  (30,505)  (29,793)
Accumulated other comprehensive loss  (5,367)  (6,458)
Treasury stock, at cost; 2,001,428 and 2,008,603 shares, respectively  (18,025)  (18,186)
TOTAL STOCKHOLDERS' EQUITY  29,150   27,874 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $245,347  $241,845 

 

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GAAP to Non-GAAP Reconciliations
(in thousands)
     
  Three Months Ended
  May 2, 2021 May 3, 2020
Reconciliation of GAAP net income (loss) to Non-GAAP net income (loss):    
GAAP net income (loss) $1,879  $(5,425)
  Restructuring and severance costs  595(a)  411(c)
  Impairment costs  261(b)  —   
Non-GAAP net income (loss) $2,735  $(5,014)
         
   Three Months Ended 
   May 2, 2021   May 3, 2020 
Reconciliation of GAAP net income (loss) to Adjusted EBITDA:        
GAAP net income (loss) $1,879  $(5,425)
  Restructuring and severance costs  595(a)  411(c)
  Impairment costs  261(b)  —   
  Depreciation and amortization  1,951   2,027 
  Share-based compensation expense  531   508 
  Total other (income) expense, net  506   1,039 
  Provision for income taxes  288   23 
Adjusted EBITDA $6,011  $(1,417)

 

        
Special item adjustments consist of the following:
(a)Primarily 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.
 
(b)Relates to impairment of capitalized software costs.      
(c)Primarily relates to actions taken by the Company as part of its continued efforts to reduce costs and to offset COVID-19 related revenue losses.

 

GAAP to Non-GAAP Reconciliations
(in thousands)
     
  Six Months Ended
  May 2, 2021 May 3, 2020
Reconciliation of GAAP net loss to Non-GAAP net income (loss):    
GAAP net loss $(567) $(16,233)
  Restructuring and severance costs  1,227(a)  1,657(c)
  Impairment costs  292(b)  11 
Non-GAAP net income (loss) $952  $(14,565)
         
   Six Months Ended 
   May 2, 2021   May 3, 2020 
Reconciliation of GAAP net loss to Adjusted EBITDA:        
GAAP net loss $(567) $(16,233)
  Restructuring and severance costs  1,227(a)  1,657(c)
  Impairment costs  292(b)  11 
  Depreciation and amortization  3,656   4,000 
  Share-based compensation expense  757   1,019 
  Total other (income) expense, net  897   2,325 
  Provision for income taxes  615   218 
Adjusted EBITDA $6,877  $(7,003)
        
Special item adjustments consist of the following:
(a)Primarily 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)Relates to impairment of capitalized software costs.      
(c)Primarily relates to the strategic initiative to offshore a significant number of identified roles to our staffing operations in India and continued efforts to reduce costs and to offset COVID-19 related revenue losses.

 

GAAP to Non-GAAP Reconciliations
(in thousands)
           
  Three Months Ended May 2, 2021 Three Months Ended May 3, 2020
  As Reported As Reported FX Impact MSP Delivery Model Shift Adjusted
Revenue          
North American Staffing $184,295  $173,386  $—    $—    $173,386 
International Staffing  27,880   24,303   2,432   —     26,735 
North American MSP  9,832   9,745   —     —     9,745 
Corporate and Other  117   187       —     187 
Eliminations  (32)  (346)  —     —     (346)
Total Revenue $222,092  $207,275  $2,432  $—    $209,707 
% change                  5.9%
                     
   

Six Months Ended

May 2, 2021

  Six Months Ended May 3, 2020
   As Reported   As Reported  FX impact  MSP Delivery Model Shift  Adjusted
Revenue                    
North American Staffing $368,511  $355,781  $—    $(2,072) $353,709 
International Staffing  51,893   50,526   3,787       54,313 
North American MSP  19,501   19,114   —     52   19,166 
Corporate and Other  236   390   —     —     390 
Eliminations  (91)  (770)  —     —     (770)
Total Revenue $440,050  $425,041  $3,787  $(2,020) $426,808 

 

GAAP to Non-GAAP Reconciliations
(in thousands)
             
  Three Months Ended May 2, 2021 Three Months Ended May 3, 2020
  As Reported Business Exited Adjusted As Reported Business Exited Adjusted
Operating Income (Loss)                        
North American Staffing $9,471  $—    $9,471  $2,576  $—    $2,576 
International Staffing  1,097   —     1,097   196   —     196 
North American MSP  309   —     309   491   —     491 
Corporate and Other  (8,204)  1   (8,203)  (7,626)  (45)  (7,671)
Total Operating Income (Loss) $2,673  $1  $2,674  $(4,363) $(45) $(4,408)
                         
   Six Months Ended May 2, 2021  Six Months Ended May 3, 2020
   As Reported  Business Exited  Adjusted  As Reported  Business Exited  Adjusted
Operating Income (Loss)                        
North American Staffing $15,646  $—    $15,646  $2,675  $—    $2,675 
International Staffing  1,479   —     1,479   570   —     570 
North American MSP  841   —     841   1,245   —     1,245 
Corporate and Other  (17,021)  1   (17,020)  (18,180)  (13)  (18,193)
Total Operating Income (Loss) $945  $1  $946  $(13,690) $(13) $(13,703)

 

GAAP to Non-GAAP Reconciliations

(in thousands)

             
  Three Months Ended May 2, 2021 Three Months Ended May 3, 2020
  As Reported Business Exited Adjusted As Reported Business Exited Adjusted
Operating Income (Loss)                        
Gross margin $36,479  $—    $36,479  $32,237  $—    $32,237 
Selling, administrative and other operating costs  32,950   —     32,950   36,189   —     36,189 
Restructuring and severance costs  595   (1)  594   411   45   456 
Impairment charges  261   —     261   —     —     —   
Total Operating Income (Loss) $2,673  $(1) $2,674  $(4,363) $(45) $(4,408)
                         
   Six Months Ended May 2, 2021  Six Months Ended May 3, 2020
   As Reported  Business Exited  Adjusted  As Reported  Business Exited  Adjusted
Operating Income (Loss)                        
Gross margin $69,161  $—    $69,161  $63,664  $—    $63,664 
Selling, administrative and other operating costs  66,697   —     66,697   75,686   —     75,686 
Restructuring and severance costs  1,227   (1)  1,226   1,657   13   1,670 
Impairment charges  292   —     292   11   —     11 
Total Operating Income (Loss) $945  $(1) $946  $(13,690) $(13) $(13,703)

 

GAAP to Non-GAAP Reconciliations
(in thousands, except per share data)
       
  Three Months Ended May 2, 2021
  As Reported Restructuring and Impairment Costs Adjusted
Earnings per Share      
Net income $1,879  $856  $2,735 
             
Per share data:            
Basic:            
Net income $0.09      $0.13 
Weighted average number of shares  21,793       21,793 
             
Diluted            
Net income $0.08      $0.12 
Weighted average number of shares  22,588       22,588 

 

  Six Months Ended May 2, 2021
  As Reported Restructuring and Impairment Costs Adjusted
Earnings per Share      
Net income (loss) $(567) $1,519  $952 
             
Per share data:            
Basic:            
Net income (loss) $(0.03)     $0.04 
Weighted average number of shares  21,793       21,793 
             
Diluted            
Net income (loss) $(0.03)     $0.04 
Weighted average number of shares  21,793       21,793 

 

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