Reports Year-Over-Year Revenue Growth and
Positive Net Income in Consecutive Quarters
Volt Information Sciences, Inc. (“Volt” or the “Company”)
(NYSE-AMERICAN: VOLT) a global provider of staffing services, today
announced financial results for the third quarter ended August 1,
2021.
Third Quarter Summary
- Revenue was $217.5 million, a 17.0% increase compared to the
third quarter of fiscal 2020; Adjusted Revenue* increased
15.5%.
- Gross margin increased 50 basis points year over year to
16.6%.
- GAAP operating income was $1.6 million, a $5.8 million
improvement compared to the prior-year quarter; Adjusted Operating
Income*, excluding impairment and restructuring charges, was $2.2
million.
- GAAP EPS was $0.03 per diluted share compared to a loss of
($0.22) per share in the third quarter of fiscal 2020; Adjusted
EPS* was $0.05 per diluted share.
- Adjusted EBITDA* was $ 4.7 million, an increase of $3.7 million
year over year.
* Adjusted Revenue, Adjusted Operating
Income (Loss), Adjusted EPS and Adjusted EBITDA are Non-GAAP
measures described and defined below.
“Our strong performance in the quarter again demonstrates the
efficacy of our strategic initiatives, highlighted by
year-over-year revenue growth and positive net income in
consecutive quarters. Despite lingering Covid-related labor and
supply chain challenges, we continued our momentum with broad-based
improvements across our organization, further narrowing the gap to
third quarter 2019 levels,” said Linda Perneau, President and Chief
Executive Officer.
Ms. Perneau added, “We remain confident that the ongoing
execution of our strategic initiatives solidifies our foundation
for sustainable growth and profitability going forward.”
Third Quarter Results
North American Staffing revenue for the quarter was $179.4
million, as compared to $154.7 million for the third quarter of
fiscal 2020. Revenue for this segment increased approximately 15.9
percent year over year. The increase is primarily attributable to
business wins with a combination of retail and mid-market clients,
combined with the expansion of business within existing
clients.
International Staffing revenue for the quarter was $28.3
million, compared to $21.7 million in the prior-year quarter.
Adjusted Revenue increased 17.3 percent year over year. The
improvement is due to increases in payroll service and staffing
business primarily in the United Kingdom and France and direct hire
revenue in the United Kingdom and Singapore.
North American MSP revenue for the third quarter was $9.8
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 16.6 percent of revenue, a 50
basis-point increase from the third 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 third quarter was $34.0 million or
15.6% of revenue, a $2.8 million increase from the prior-year
quarter. The increase was primarily attributable to incentives on
higher sales volume as well as higher labor and medical expenses.
These increases were partially offset by lower facility costs.
Adjusted EBITDA, which is a Non-GAAP measure, was $4.7 million
for the third quarter of fiscal 2021, compared to $1.0 million in
the prior-year quarter.
2021 Earnings Conference Call and Webcast
Volt Information Sciences, Inc. will conduct a conference call
on Monday, September 13, 2021, at 5:00 p.m. Eastern Time, to review
the financial results for the third quarter ended August 1, 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.
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
Nine Months Ended
August 1, 2021
May 2, 2021
August 2, 2020
August 1, 2021
August 2, 2020
Net revenue
$
217,534
$
222,092
$
185,941
$
657,584
$
610,982
Cost of services
181,334
185,613
155,983
552,223
517,360
Gross margin
36,200
36,479
29,958
105,361
93,622
Selling, administrative and other operating costs
34,039
32,950
31,245
100,736
106,931
Restructuring and severance costs
489
595
546
1,716
2,203
Impairment charges
112
261
2,384
404
2,395
Operating income (loss)
1,560
2,673
(4,217
)
2,505
(17,907
)
Interest income (expense), net
(445
)
(430
)
(467
)
(1,352
)
(1,788
)
Foreign exchange gain (loss), net
(34
)
71
571
279
(23
)
Other income (expense), net
(152
)
(147
)
(168
)
(455
)
(578
)
Income (loss) before income taxes
929
2,167
(4,281
)
977
(20,296
)
Income tax provision
314
288
556
929
774
Net income (loss)
$
615
$
1,879
$
(4,837
)
$
48
$
(21,070
)
Per share data: Basic: Net income (loss)
$
0.03
$
0.09
$
(0.22
)
$
-
$
(0.98
)
Weighted average number of shares
21,968
21,793
21,589
21,851
21,474
Diluted: Net income (loss)
$
0.03
$
0.08
$
(0.22
)
$
-
$
(0.98
)
Weighted average number of shares
22,651
22,588
21,589
22,542
21,474
Segment data: Net revenue: North
American Staffing
$
179,381
$
184,295
$
154,711
$
547,892
$
510,492
International Staffing
28,256
27,880
21,749
80,149
72,275
North American MSP
9,790
9,832
9,436
29,291
28,550
Corporate and Other
121
117
149
357
539
Eliminations
(14
)
(32
)
(104
)
(105
)
(874
)
Net revenue
$
217,534
$
222,092
$
185,941
$
657,584
$
610,982
Operating income (loss): North American Staffing
$
8,319
$
9,471
$
2,691
$
23,965
$
5,366
International Staffing
1,180
1,097
551
2,659
1,121
North American MSP
571
309
944
1,412
2,189
Corporate and Other
(8,510
)
(8,204
)
(8,403
)
(25,531
)
(26,583
)
Operating income (loss)
$
1,560
$
2,673
$
(4,217
)
$
2,505
$
(17,907
)
Work days
63
65
63
187
187
Condensed Consolidated Statements of Cash Flows (in
thousands)
Nine Months Ended
August 1, 2021
August 2, 2020
Cash, cash equivalents and restricted cash beginning of
the period
$
56,433
$
38,444
Cash provided by (used in) all other operating activities
14,449
(4,821
)
Changes in operating assets and liabilities
(9,575
)
17,903
Net cash provided by operating activities
4,874
13,082
Purchases of property, equipment, and software
(2,649
)
(3,925
)
Net cash provided by all other investing activities
34
589
Net cash used in investing activities
(2,615
)
(3,336
)
Net draw-down of borrowings
-
5,000
Debt issuance costs
(166
)
(331
)
Net cash used in all other financing activities
(428
)
(74
)
Net cash (used in) provided by financing activities
(594
)
4,595
Effect of exchange rate changes on cash, cash equivalents
and restricted cash
(29
)
(463
)
Net increase in cash, cash equivalents and restricted
cash
1,636
13,878
Cash, cash equivalents and restricted cash end of the
period
$
58,069
$
52,322
Cash paid during the period: Interest
$
1,374
$
1,858
Income taxes
$
252
$
1,445
Reconciliation of cash, cash equivalents and restricted
cash end of the period: Current Assets: Cash and cash
equivalents
$
49,595
$
30,928
Restricted cash included in Restricted cash and short term
investments
8,474
21,394
Cash, cash equivalents and restricted cash, at end of period
$
58,069
$
52,322
Condensed Consolidated Balance Sheets (in thousands,
except share amounts) August 1, 2021 November 1,
2020 ASSETS CURRENT ASSETS: Cash and cash
equivalents
$
49,595
$
38,550
Restricted cash and short-term investments
11,918
20,736
Trade accounts receivable, net of allowances of $129 and $219,
respectively
127,200
121,916
Other current assets
8,503
7,058
TOTAL CURRENT ASSETS
197,216
188,260
Property, equipment and software, net
18,977
22,167
Right of use assets - operating leases
23,700
25,107
Other assets, excluding current portion
6,775
6,311
TOTAL ASSETS
$
246,668
$
241,845
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accrued compensation
$
19,700
$
18,357
Accounts payable
28,670
31,221
Accrued taxes other than income taxes
28,208
12,983
Accrued insurance and other
16,337
15,908
Operating lease liabilities
6,985
7,144
Income taxes payable
957
891
TOTAL CURRENT LIABILITIES
100,857
86,504
Accrued payroll taxes and other, excluding current portion
21,833
29,988
Operating lease liabilities, excluding current portion
35,005
38,232
Income taxes payable, excluding current portion
90
90
Deferred income taxes
-
3
Long-term debt
59,230
59,154
TOTAL LIABILITIES
217,015
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 - 22,079,278 and 21,729,400
shares, respectively
2,374
2,374
Paid-in capital
79,338
79,937
Accumulated deficit
(33,405
)
(29,793
)
Accumulated other comprehensive loss
(5,556
)
(6,458
)
Treasury stock, at cost; 1,658,725 and 2,008,603 shares,
respectively
(13,098
)
(18,186
)
TOTAL STOCKHOLDERS' EQUITY
29,653
27,874
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
246,668
$
241,845
GAAP to Non-GAAP Reconciliations (in thousands)
Three Months Ended
August 1, 2021
August 2, 2020
Reconciliation of GAAP net income (loss) to Non-GAAP net income
(loss): GAAP net income (loss)
$
615
$
(4,837
)
Restructuring and severance costs
489
(a)
546
(b) Impairment costs
112
2,384
(c)
Non-GAAP net income (loss)
$
1,216
$
(1,907
)
Three Months Ended
August 1, 2021
August 2, 2020
Reconciliation of GAAP net income (loss) to Adjusted EBITDA:
GAAP net income (loss)
$
615
$
(4,837
)
Restructuring and severance costs
489
(a)
546
(b) Impairment costs
112
2,384
(c) Depreciation and amortization
1,986
1,884
Share-based compensation expense
537
414
Total other (income) expense, net
631
64
(Benefit) provision for income taxes
314
556
Adjusted EBITDA
$
4,684
$
1,011
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)
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.
(c)
Relates to consolidating and exiting certain leased office
locations throughout North America where we could be fully
operational and successfully support our clients and business
operations remotely.
GAAP to Non-GAAP Reconciliations (in thousands)
Nine Months Ended August 1, 2021 August 2,
2020 Reconciliation of GAAP net income (loss) to Non-GAAP
net income (loss): GAAP net income (loss)
$
48
$
(21,070
)
Restructuring and severance costs
1,716
(a)
2,203
(c) Impairment costs
404
(b)
2,395
(d)
Non-GAAP net income (loss)
$
2,168
$
(16,472
)
Nine Months Ended August 1, 2021 August 2,
2020 Reconciliation of GAAP net loss to Adjusted EBITDA:
GAAP net income (loss)
$
48
$
(21,070
)
Restructuring and severance costs
1,716
(a)
2,203
(c) Impairment costs
404
(b)
2,395
(d) Depreciation and amortization
5,642
5,884
Share-based compensation expense
1,294
1,433
Total other (income) expense, net
1,528
2,389
Provision for income taxes
929
774
Adjusted EBITDA
$
11,561
$
(5,992
)
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.
(d)
Primarily relates to consolidating and exiting certain leased
office locations throughout North America where we could be fully
operational and successfully support our clients and business
operations remotely.
GAAP to Non-GAAP Reconciliations (in thousands)
Three MonthsEnded August 1, 2021 Three Months
Ended August 2, 2020 As Reported As Reported
FX Impact MSP DeliveryModel Shift Adjusted
Revenue North American Staffing
$
179,381
$
154,711
$
-
$
-
$
154,711
International Staffing
28,256
21,749
2,343
-
24,092
North American MSP
9,790
9,436
-
-
9,436
Corporate and Other
121
149
-
149
Eliminations
(14
)
(104
)
-
-
(104
)
Total Revenue
$
217,534
$
185,941
$
2,343
$
-
$
188,284
% change
15.5
%
Nine Months EndedAugust 1, 2021 Nine Months Ended
August 2, 2020 As Reported As Reported FX
impact MSP DeliveryModel Shift Adjusted
Revenue North American Staffing
$
547,892
$
510,492
$
-
$
(2,072
)
$
508,420
International Staffing
80,149
72,275
6,130
78,405
North American MSP
29,291
28,550
-
52
28,602
Corporate and Other
357
539
-
-
539
Eliminations
(105
)
(874
)
-
-
(874
)
Total Revenue
$
657,584
$
610,982
$
6,130
$
(2,020
)
$
615,092
% change
6.9
%
GAAP to Non-GAAP Reconciliations (in thousands)
Three Months Ended August 1, 2021 Three Months
Ended August 2, 2020 As Reported Business Exited
Adjusted As Reported Business Exited
Adjusted Operating Income (Loss) North American
Staffing
$
8,319
$
-
$
8,319
$
2,691
$
-
$
2,691
International Staffing
1,180
-
1,180
551
-
551
North American MSP
571
-
571
944
-
944
Corporate and Other
(8,510
)
4
(8,506
)
(8,403
)
(14
)
(8,417
)
Total Operating Income (Loss)
$
1,560
$
4
$
1,564
$
(4,217
)
$
(14
)
$
(4,231
)
Nine Months Ended August 1, 2021 Nine Months Ended
August 2, 2020 As Reported Business Exited
Adjusted As Reported Business Exited
Adjusted Operating Income (Loss) North American
Staffing
$
23,965
$
-
$
23,965
$
5,366
$
-
$
5,366
International Staffing
2,659
-
2,659
1,121
-
1,121
North American MSP
1,412
-
1,412
2,189
-
2,189
Corporate and Other
(25,531
)
5
(25,526
)
(26,583
)
(27
)
(26,610
)
Total Operating Income (Loss)
$
2,505
$
5
$
2,510
$
(17,907
)
$
(27
)
$
(17,934
)
GAAP to Non-GAAP Reconciliations (in thousands)
Three Months Ended August 1, 2021 Three Months
Ended August 2, 2020 As Reported Business Exited
Adjusted As Reported Business Exited
Adjusted Operating Income (Loss) Gross margin
$
36,200
$
-
$
36,200
$
29,958
$
-
$
29,958
Selling, administrative and other operating costs
34,039
-
34,039
31,245
-
31,245
Restructuring and severance costs
489
(4
)
485
546
14
560
Impairment charges
112
-
112
2,384
-
2,384
Total Operating Income (Loss)
$
1,560
$
4
$
1,564
$
(4,217
)
$
(14
)
$
(4,231
)
Nine Months Ended August 1, 2021 Nine Months Ended
August 2, 2020 As Reported Business Exited
Adjusted As Reported Business Exited
Adjusted Operating Income (Loss) Gross margin
$
105,361
$
-
$
105,361
$
93,622
$
-
$
93,622
Selling, administrative and other operating costs
100,736
-
100,736
106,931
-
106,931
Restructuring and severance costs
1,716
(5
)
1,711
2,203
27
2,230
Impairment charges
404
-
404
2,395
-
2,395
Total Operating Income (Loss)
$
2,505
$
5
$
2,510
$
(17,907
)
$
(27
)
$
(17,934
)
GAAP to Non-GAAP Reconciliations (in thousands, except
per share data) Three Months Ended August 1, 2021
As Reported Restructuring andImpairment Costs
Adjusted Earnings per Share Net income
$
615
$
601
$
1,216
Per share data: Basic: Net income
$
0.03
$
0.06
Weighted average number of shares
21,968
21,968
Diluted Net income
$
0.03
$
0.05
Weighted average number of shares
22,651
22,651
Nine Months Ended August 1, 2021 As
Reported Restructuring andImpairment Costs
Adjusted Earnings per Share Net income
$
48
$
2,120
$
2,168
Per share data: Basic: Net income
$
0.00
$
0.10
Weighted average number of shares
21,851
21,851
Diluted Net income
$
0.00
$
0.10
Weighted average number of shares
22,542
22,542
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210913005064/en/
Investor Relations Contacts: Volt Information Sciences,
Inc. voltinvest@volt.com
Joe Noyons Three Part Advisors jnoyons@threepa.com
817-778-8424
Volt Information Sciences (AMEX:VOLT)
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De Juin 2023 à Juin 2024