Click here to close now.

SYS-CON MEDIA Authors: Elizabeth White, AppDynamics Blog, Ian Goldsmith, Ed Featherston, Pat Romanski

News Feed Item

Volt Information Sciences Reports Fourth Quarter and Fiscal Year Results

Volt Information Sciences, Inc. (OTC:VISI) today reported financial results for its fiscal fourth quarter and fiscal year ended November 3, 2013. The Company reported net income in the fourth quarter of 2013 of $1.6 million, or $0.08 per share, compared to a net loss of $2.0 million, or $0.10 per share, in the fourth quarter of 2012, and a proforma net loss in the fourth quarter of 2013 of $0.3 million compared to a proforma net loss in the fourth quarter of 2012 of $4.4 million. For the full fiscal year the Company reported a net loss in 2013 of $30.9 million, or $1.48 per share compared to a net loss of $13.6 million, or $0.65 per share, in fiscal 2012.

Non-GAAP Proforma Measures – Unrecognized Revenue – Volt subsidiaries sometimes provide services despite a customer arrangement not yet being finalized, or continue to provide services under an expired arrangement while a renewal arrangement is being finalized. Generally Accepted Accounting Principles (“GAAP”) usually requires that services revenue be deferred until arrangements are finalized or in some cases until cash is received, which causes some periods to include the expense of providing services although the related revenue is not recognized until a subsequent period (“Unrecognized Revenue”). The following discussion refers to financial data determined both using GAAP as well as on a non-GAAP proforma basis. The non-GAAP proforma basis includes adjustments for Unrecognized Revenue so that revenue is shown in the same period as the related services are provided. This non-GAAP financial information is used by management and provided herein primarily to provide a more complete understanding of the Company’s business results and trends. In addition, the Company believes that lenders, analysts and others in the investment community use this non-GAAP financial information to assess the Company’s historical results, and that failure to report this non-GAAP measure could result in a potentially misplaced perception that the Company’s results have either met, exceeded or underperformed expectations. This non-GAAP information should not be considered an alternative for, or in isolation from, the financial information prepared and presented in accordance with GAAP. In addition, this measure may not be comparable to similarly titled measures used by other companies.

Fourth Fiscal Quarter Results

Operating income of $2.8 million in the fourth quarter of 2013 included restructuring costs of $2.8 million, restatement and associated investigation expenses of $2.5 million and recognition of previously deferred software systems revenues and costs, net of current period deferrals, of $4.6 million. Without these items the Company would have had operating income of $3.5 million and a proforma operating income of $1.6 million.

Operating loss in the fourth quarter of fiscal 2012 of $0.5 million included restatement and associated investigation expenses of $14.9 million, recognition of previously deferred software systems revenues and costs, net of current period deferrals, of $1.3 million and a gain on the sale of building of $4.4 million. Without these items the Company would have had operating income of $8.7 million and proforma operating income of $6.3 million.

In addition to the above, operating results and proforma operating results decreased in the fourth quarter of 2013 over 2012 due to a decrease in Computer Systems results of approximately $6.0 million due to lower transaction volumes, pricing and maintenance levels with relatively fixed costs and investment in developing the Company’s directory assistance software platform into full-featured call center software, partially offset by an increase in Staffing Services results of approximately $0.7 million primarily due to higher traditional staffing margins.

Net revenue in the fourth quarter of 2013 decreased $24.8 million to $546.8 million from $571.6 million in 2012, and proforma net revenue decreased by $24.3 million, or 4.3%, to $544.9 million from $569.2 million in the fourth quarter of 2012. The change in revenue was primarily the result of decreased Staffing Services revenues by $26.2 million (proforma of $25.7 million) resulting from the Company’s increased focus on exiting or reducing business levels with customers where profitability or business terms are unfavorable, lower staffing levels at a few large customers related to their particular business demand level, slightly lower managed services revenue, and from lower Computer Systems revenues from several large implementations reaching the end of the maintenance periods over which the projects were being amortized and lower transaction volumes, pricing and maintenance levels.

 

Fiscal Year Results

Unaudited (in Thousands)

 

Results of Operations by Segment (Fiscal 2013 vs. 2012)

 
    Year ended November 3, 2013     Year ended October 28, 2012
(in thousands) Total    

Staffing Services

    Computer Systems     Other     Total     Staffing Services     Computer Systems     Other
Net Revenue $2,090,937     $1,899,723     $73,465     $117,749     $2,246,127     $2,027,601     $99,679     $118,847
Expenses
Direct cost of staffing services revenue 1,634,365 1,634,365 - - 1,738,933 1,738,933 - -
Cost of other revenue 160,199 - 65,680 94,519 163,853 - 68,281 95,572
Selling, administrative and other operating costs 284,748 239,105 24,314 21,329 300,116 251,410 26,897 21,809
Amortization of purchased intangible assets 1,369 34 858 477 1,382 47 859 476
Restructuring costs 4,726     781     3,945     -     -     -     -     -
Segment operating income (loss) 5,530 25,438 (21,332) 1,424 41,843 37,211 3,642 990
Corporate general and administrative 9,286 10,731
Gain on sale of building - (4,418)
Restatement and associated investigations 24,828 42,906
Operating loss (28,584) (7,376)
Other expense, net (1,822) (3,836)
Income tax provision 469 2,391
Net loss $(30,875) $(13,603)
 
NON-GAAP PROFORMA TABLE
Year ended November 3, 2013     Year ended October 28, 2012
(in thousands) Total     Staffing Services     Computer Systems     Other     Total     Staffing Services     Computer Systems     Other
Net Revenue $2,090,937 $1,899,723 $73,465 $117,749 $2,246,127 $2,027,601 $99,679 $118,847
Recognition of previously unrecognized revenue (11,166) (11,166) - - (30,090) (30,090) - -
Additions to unrecognized revenue 4,869     4,869     -     -     11,731     11,731     -     -
Net non-GAAP proforma adjustment (6,297) (6,297) - - (18,359) (18,359) - -
                                           
Non-GAAP proforma net revenue 2,084,640     1,893,426     73,465     117,749     2,227,768     2,009,242     99,679     118,847
 
Expenses

Direct cost of staffing services revenue

1,634,365 1,634,365 - - 1,738,933 1,738,933 - -
Cost of other revenue 160,199 - 65,680 94,519 163,853 - 68,281 95,572
Selling, administrative and other operating costs 284,748 239,105 24,314 21,329 300,116 251,410 26,897 21,809
Amortization of purchased intangible assets 1,369 34 858 477 1,382 47 859 476
Restructuring costs 4,726     781     3,945     -     -     -     -     -
Non-GAAP proforma segment operating income (loss) (767) 19,141 (21,332) 1,424 23,484 18,852 3,642 990
 
Non-GAAP proforma operating loss (34,881) (25,735)
 
Non-GAAP proforma net loss $(37,172) $(31,962)
 

Operating loss of $28.6 million included restatement and associated investigation expenses of $24.8 million, restructuring costs of $4.7 million and recognition of previously deferred software systems revenues and costs of $7.9 million. Without these items the Company would have had an operating loss of $7.0 million and a proforma operating loss of $13.3 million.

Operating loss of $7.4 million in fiscal 2012 included restatement and associated investigation expenses of $42.9 million and recognition of previously deferred software systems revenues and costs, net of current period deferrals, of $19.1 million. Without these items the Company would have had operating income of $16.4 million and a proforma operating loss of $2.0 million.

Operating results and proforma operating results were lower in fiscal 2013 than fiscal 2012 due to the above reasons and a decrease in Computer Systems results of $9.8 million due to lower transaction volumes, pricing and maintenance levels with relatively fixed costs of revenue and investment in developing the Company’s directory assistance software platform into full-featured call center software and a gain on sale of building of $4.4 million in 2012 with no similar gain in 2013. The decreases were partially offset by an increase in Staffing Services results of $1.0 million primarily due to higher traditional staffing margins.

Net revenue in fiscal 2013 decreased $155.2 million to $2,090.9 million from $2,246.1 million in fiscal 2012, and proforma net revenue decreased by $143.2 million, or 6.4%, to $2,084.6 million from $2,227.8 million in fiscal 2012. The change in revenue, including the impact of fiscal 2013 consisting of 53 weeks while fiscal 2012 consisted of 52 weeks, was primarily the result of decreased Staffing Services revenues by $127.9 million (proforma of $115.8 million) resulting from the Company’s increased focus on exiting or reducing business levels with customers where profitability or business terms are unfavorable, lower staffing levels at a few large customers related to their particular business demand level, slightly lower managed services revenue, and $12.1 million lower recognition of previously unrecognized staffing revenues, and from lower Computer Systems revenues of $26.2 million from lower transaction volumes, pricing and maintenance levels as well as several large implementations reaching the end of the maintenance periods over which the projects were being amortized. Revenue and proforma revenue included recognition of previously deferred software systems revenues, net of current period deferrals, of $7.6 million in fiscal 2013 and $31.6 million in fiscal 2012, a decrease of $24.0 million.

Fiscal Year Results By Segment

The Company’s Staffing Services segment operating income in fiscal 2013 decreased $11.8 million to $25.4 million from $37.2 million in fiscal 2012, and proforma operating income in fiscal 2013 increased by $0.2 million, or 1.5%, to $19.1 million from $18.9 million in fiscal 2012. The change in operating income is primarily due to a $3.0 million indirect tax recovery, lower traditional staffing revenue, although at higher margin ratios, and selling, administrative and other operating costs decreases lagging the decrease in revenue. GAAP results include $12.1 million lower recognition of previously unrecognized staffing revenue.

Staffing Services net revenue in fiscal 2013 decreased $127.9 million to $1,899.7 million from $2,027.6 million in fiscal 2012, and proforma net revenue decreased by $115.8 million, or 5.8%, to $1,893.4 million from $2,009.2 million in fiscal 2012. This decrease is primarily due to the Company’s increased focus on exiting or reducing business levels with customers where profitability or business terms are unfavorable, lower staffing levels at a few large customers related to their particular business demand level, slightly lower managed services revenue, and $12.1 million lower recognition of previously unrecognized staffing revenues.

The Company’s Computer Systems segment operating results in fiscal 2013 decreased by $24.9 million to a loss of $21.3 million compared to income of $3.6 million in fiscal 2012 primarily due to lower amortization of previously deferred revenue and previously deferred costs of $11.2 million as several large system implementations reaching the end of the maintenance periods over which the revenue and costs of projects are being amortized. Without the recognition of previously deferred software systems revenues and costs, the segment operating loss would have been $29.3 million in 2013 and $15.5 million in 2012. The decline was primarily due to $9.9 million of lower transaction and maintenance revenues with relatively fixed data acquisition costs and restructuring costs of $3.9 million as we reduced headcount in response to lower revenue levels.

Computer Systems net revenue in fiscal 2013 decreased by $26.2 million, or 26.3%, to $73.5 million from $99.7 million in fiscal 2012. This decrease was primarily a result of lower transaction revenues by $12.4 million due to both lower volumes and pricing, lower maintenance revenue by $5.0 million, and lower systems revenues by $8.8 million as several large implementations reaching the end of the maintenance periods over which the revenue of projects were being amortized and were not replaced by similar levels of new system implementations.

The Company’s Other reportable segment operating income remained relatively flat at $1.4 million in fiscal 2013 from $1.0 million in fiscal 2012. The segment’s net revenue in fiscal 2013 decreased $1.1 million, or 0.9%, to $117.7 million from $118.8 million in fiscal 2012. The decrease was due to lower telecommunications infrastructure services revenue primarily due to lower volume of projects partially offset by higher information technology infrastructure services revenue driven primarily by a higher volume of business resulting primarily from new customers and to a lesser extent from net expanded business with existing customers at billing rates that remained relatively consistent between the periods.

Liquidity

During fiscal 2013, the Company disbursed $37.3 million in connection with the restatement and related investigations and provided cash of from all other operating activities $7.6 million. The Company used $11.3 million for capital expenditures, net of $0.3 million received from the sale of property and equipment, and received $0.4 million for the sale of investments net of purchases. Borrowing under the accounts receivable securitization program increased by $22.0 million and decreases in restricted cash as collateral for foreign currency borrowings and banking facilities provided $3.8 million, partially offset by repayment of approximately $0.8 million of long-term debt.

 

VOLT INFORMATION SCIENCES, INC.

Condensed Statements of Cash Flows

Unaudited (in Thousands)

    Three Months Ended     Fiscal Year Ended
November 3, 2013     October 28, 2012     November 3, 2013     October 28, 2012
           
Cash and cash equivalents at beginning of the period $21,389 $33,118 $26,483 $44,567
 
Cash used in connection with restatement and related investigations (2,674) (11,826) (37,292) (37,160)
Net cash provided by (used in) all other operating activities (4,726)     2,010     7,581     (3,637)
Net cash used in operating activities (7,400) (9,816) (29,711) (40,797)
 
Net cash used in investing activities (4,353) 2,257 (10,953) (7,642)
 
Net cash released (restricted) as collateral for borrowings (614) (328) 3,796 (1,391)
Net cash provided by all other financing activities 2,092     1,252     21,499     31,746
Net cash provided by financing activities 1,478 924 25,295 30,355
 
Net increase (decrease) in cash and cash equivalents (10,275) (6,635) (15,369) (18,084)
Cash and cash equivalents at end of the period $11,114 $26,483 $11,114 $26,483
 
 

Supplemental information:

 

Cash paid during the period for:

Interest

$811

$732

$2,925

$2,866

Income taxes

$999

$1,246

$10,822

$3,740

 

On November 3, 2013, the Company had cash and cash equivalents of $11.1 million and an additional $31.8 million of cash restricted as collateral for foreign currency credit lines and banking facilities. The Company also had approximately $25.5 million available from its short-term financing program. Excluding $8.9 million of long-term debt, the Company’s consolidated borrowings were $167.3 million at November 3, 2013, which included $22.3 million of foreign currency borrowings used primarily to hedge net investments in foreign subsidiaries that are fully collateralized by restricted cash, and $142.0 million drawn under the $200.0 million short-term financing program. The amount drawn under the short-term borrowing financing program was subsequently decreased to $120.0 million in January 2014 at which time there was approximately $20.3 million additional borrowing available.

 

Balance Sheets

Unaudited (in Thousands, except share amounts)

   

November 3, 2013

    October 28, 2012
ASSETS    
CURRENT ASSETS:
Cash and cash equivalents $11,114 $26,483
Restricted cash 47,356 61,927
Short-term investments 6,144 5,611
Trade accounts receivable, net of allowances of $1,811 and $1,899, respectively 293,305 334,947
Recoverable income taxes 17,150 13,884
Prepaid insurance 14,248 11,138
Other current assets 21,097     15,406
TOTAL CURRENT ASSETS 410,414 469,396
Prepaid insurance and other assets, excluding current portion 43,473 38,479
Property, equipment and software, net 37,324 39,052
Purchased intangible assets, net and goodwill 9,101     10,645
TOTAL ASSETS $500,312     $557,572
 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued compensation $53,474 $58,183
Accounts payable 57,165 86,523
Accrued taxes other than income taxes 19,520 29,361
Accrued insurance and other 44,133 34,927
Deferred revenue, net, current portion 13,335 24,240

Short-term borrowings, including current portion of long-term debt

168,114     145,727
TOTAL CURRENT LIABILITIES 355,741 378,961
Accrued insurance, excluding current portion 13,003 9,010
Deferred revenue, net, excluding current portion 2,839 4,268
Income taxes payable, excluding current portion 8,659 10,424
Deferred income taxes 1,702 2,759
Long-term debt, excluding current portion 8,127     9,033
TOTAL LIABILITIES 390,071 414,455
 
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 - 23,536,769 and 23,500,103, respectively; Outstanding - 20,849,462 and 20,812,796, respectively

2,354

2,350

Paid-in capital 72,003 71,591
Retained earnings 83,007 113,795
Accumulated other comprehensive loss (5,243) (2,739)
Treasury stock, at cost; 2,687,307 shares (41,880)     (41,880)
TOTAL STOCKHOLDERS' EQUITY 110,241     143,117
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $500,312     $557,572
 

Preliminary Nature of Information

The financial information contained in this press release is preliminary and unaudited, and has been prepared by management based on currently available Company data. This financial information is subject to change upon the completion of the audit of the Company’s fiscal 2013 annual financial statements by the Company’s independent accountants. There can be no assurance that the amounts reported today will not differ, including materially, from those reported when the Company files its 2013 Form 10-K. Please refer to the Company’s reports filed with the SEC for further information. The Company is not in a position to file its Annual Report on Form 10-K for the fiscal year ended November 3, 2013, by the prescribed due date of January 17, 2014, because it has not completed its evaluation of the effectiveness of its internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). The Company’s Annual Report on Form 10-K will be filed as soon as practicable, which it expects will be no later than February 3, 2014.

About Volt Information Sciences, Inc.

Volt Information Sciences, Inc. is a leading provider of global infrastructure solutions in technology, information services and staffing acquisition for its FORTUNE 100 customer base. Operating through an international network of servicing locations, the Staffing Services Segment fulfills IT, engineering, administrative, and industrial workforce requirements of its customers, for professional search and temporary/contingent personnel as well as managed services programs. Technology infrastructure services include telecommunications engineering, construction, and installation; and IT managed services and maintenance. Information-based services are primarily directory assistance, operator services, database management, and directory printing. Visit www.volt.com.

Forward-Looking Statements

This press release contains forward-looking statements. Words such as “may,” “will,” “should,” “likely,” “could,” “seek,” “believe,” “expect,” “plan,” “anticipate,” “estimate,” “optimistic,” “confident,” “project,” “intend,” “strategy,” “designed to,” and similar expressions are intended to identify forward-looking statements about the Company’s results of operations, future plans, objectives, performance, intentions and expectations. Forward-looking statements are subject to a number of known and unknown risks, including, among others, the timing of, and effects of the delay in, filing the Company’s financial statements with the Securities and Exchange Commission, 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.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Docker offers a new, lightweight approach to application portability. Applications are shipped using a common container format and managed with a high-level API. Their processes run within isolated namespaces that abstract the operating environment independently of the distribution, versions, network setup, and other details of this environment. This "containerization" has often been nicknamed "the new virtualization." But containers are more than lightweight virtual machines. Beyond their small...
Grow your business with enterprise wearable apps using SAP Platforms and Google Glass. SAP and Google just launched the SAP and Google Glass Challenge, an opportunity for you to innovate and develop the best Enterprise Wearable App using SAP Platforms and Google Glass and gain valuable market exposure. In his session at @ThingsExpo, Brian McPhail, Senior Director of Business Development, ISVs & Digital Commerce at SAP, outlined the timeline of the SAP Google Glass Challenge and the opportunity...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo – to be held June 9-11, 2015, at the Javits Center in New York City, NY – is now accepting Hackathon proposals. Hackathon sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem. At Cloud Expo 2014 Silicon Valley, IBM held the Bluemix Developer Playground on November 5 and ElasticBox held the DevOps Hackathon on November 6. Both events took place on the expo fl...
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps,...
A new definition of Big Data & the practical applications of the defined components & associated technical architecture models This presentation introduces a new definition of Big Data, along with the practical applications of the defined components and associated technical architecture models. In his session at Big Data Expo, Tony Shan will start with looking into the concept of Big Data and tracing back the first definition by Doug Laney, and then he will dive deep into the description of 3V...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
NuoDB just introduced the Swifts 2.1 Release. In this demo at 15th Cloud Expo, Seth Proctor, CTO of NuoDB, Inc., discussed why scaling databases in the cloud is challenging, why building your application on top of the infrastructure that is designed with this in mind makes a difference, and what you can do with NuoDB that simplifies your programming model, your operations model.
As enterprises look to take advantage of the cloud, they need to understand the importance of safeguarding their confidential and sensitive data in cloud environments. Enterprises must protect their data from (i) system administrators who don't need to see the data in the clear and (ii) adversaries who become system administrators from stolen credentials. In short, enterprises must take control of their data: The best way to do this is by using advanced encryption, centralized key management and...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...
Hovhannes Avoyan, CEO of Monitis, Inc., a provider of on-demand systems management and monitoring software to 50,000 users spanning small businesses and Fortune 500 companies, has surpassed 1.5 million page views on the SYS-CON family of online magazines, which includes Cloud Computing Journal, DevOps Journal, Internet of Things Journal, and Big Data Journal. His home page at SYS-CON can be found at Montis.SYS-CON.com
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
SYS-CON Events announced today that Liaison Technologies, a leading provider of data management and integration cloud services and solutions, has been named "Silver Sponsor" of SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York, NY. Liaison Technologies is a recognized market leader in providing cloud-enabled data integration and data management solutions to break down complex information barriers, enabling enterprises to make sm...
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, will explain the best practices of continuous testing at high scale, which is r...
What are the benefits of using an enterprise-grade orchestration platform? In their session at 15th Cloud Expo, Nate Gordon, Director of Technology at Appcore, and Kedar Poduri, Senior Director of Product Management at Citrix Systems, took a closer look at the architectural design factors needed to support diverse workloads and how to run these workloads efficiently as a service provider. They also discussed how to deploy private cloud environments in 15 minutes or less.