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 30,
2022.
Summary of First Quarter 2022 Results
- Revenue was $226.9 million, a 4.1% increase compared to the
first quarter of fiscal 2021; Adjusted Revenue* increased
4.5%.
- Gross Margin increased 50 basis points year over year to
15.5%.
- GAAP Operating Loss was $0.5 million, a $1.2 million
improvement compared to the prior-year quarter; Operating Income,
excluding impairment and restructuring charges, was $0.1
million.
- GAAP EPS was ($0.06) per share, a five-cent improvement from
the first quarter of fiscal 2021; Adjusted EPS* was $0.03 per
diluted share.
- Adjusted EBITDA* was $2.9 million, an increase of $2.0 million
year over year.
* Adjusted Revenue, Adjusted EPS and
Adjusted EBITDA are Non-GAAP measures described and defined
below.
“I am very pleased with yet another quarter of strong
performance, propelling our positive growth trajectory despite the
labor supply challenges. Our consistent performance demonstrates
our business strategies are sustainable,” said Linda Perneau,
President and Chief Executive Officer. “We remain confident that
with the steady execution of our strategic initiatives and
continued heightened demand for our workforce solutions, we will
see similar momentum in our second quarter.”
First Quarter Results
North American Staffing revenue was $191.2 million, a 3.8
percent increase compared to $184.2 million in the prior-year
quarter. The increase is primarily attributable to business wins in
a combination of retail and mid-market clients, combined with the
expansion of business within existing clients and improvements in
direct hire revenue.
International Staffing revenue was $26.0 million, compared to
$24.0 million in the prior-year quarter. Adjusted Revenue increased
12.3 percent year over year primarily due to increased direct hire
revenue in the United Kingdom and Singapore, as well as increases
in other staffing business in France, Belgium and the United
Kingdom.
North American MSP revenue was $9.7 million, a slight increase
from the prior year quarter, primarily attributable to increased
demand in its payroll service business offset by a decrease in
managed service revenue.
Gross margin was 15.5 percent of revenue, a 50 basis-point
increase from the prior-year quarter. The increase is primarily
attributable to improved margins and higher direct hire revenue in
our North American and International Staffing segments.
SG&A expense was $35.0 million, or 15.4 percent of revenue,
a $1.2 million increase from the prior-year quarter. The increase
was primarily attributable to higher labor costs, professional fees
and depreciation expense.
Adjusted EBITDA, which is a Non-GAAP measure, was $2.9 million
for the first quarter of fiscal 2022, compared to $0.9 million in
the prior-year quarter.
Subsequent Events
The Company and Vega Consulting, Inc. (“Vega”), an affiliate of
ACS Solutions, a global provider of information technology
solutions and services (www.acsicorp.com), announced on March 14,
2022, that Volt and Vega entered into a definitive merger agreement
under which Volt will be acquired for $6.00 per share in cash. This
per share purchase price represents a premium of 99% to the
Company’s closing stock price on March 11, 2022.
Vega will commence a tender offer no later than March 25, 2022,
to acquire all outstanding shares of Volt for $6.00 per share in
cash. The merger agreement was approved by Volt’s board of
directors, which recommends that Volt stockholders tender their
shares in the tender offer. Additional information related to the
Merger Agreement can be found within the Form 8-K filed by the
Company on March 14, 2022.
In light of the announced transaction, the earnings conference
call that was scheduled for Tuesday, March 15, 2022 at 5:00 p.m. ET
will no longer be held.
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 may provide 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 sold
or 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. 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 Operating Income (Loss) is defined as operating income
(loss) excluding businesses sold or 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.
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.
The Company’s computation of Adjusted Revenue, Adjusted
Operating Income (Loss), Adjusted EPS and Adjusted EBITDA may not
be comparable to other similarly titled measures computed by other
companies because all companies do not calculate these measures in
the same fashion.
About Volt Information Sciences, Inc.
Volt 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
Condensed Consolidated Results of Operations
(in thousands, except per share data) (unaudited)
Three Months Ended January 30, 2022 October 31,
2021 January 31, 2021 Net revenue
$
226,928
$
227,809
$
217,958
Cost of services
191,835
189,648
185,276
Gross margin
35,093
38,161
32,682
Selling, administrative and other operating costs
34,976
34,691
33,747
Restructuring and severance costs
591
1,123
632
Impairment charges
23
20
31
Operating income (loss)
(497
)
2,327
(1,728
)
Interest income (expense), net
(414
)
(416
)
(477
)
Foreign exchange gain (loss), net
(12
)
39
242
Other income (expense), net
(143
)
(150
)
(156
)
Income (loss) before income taxes
(1,066
)
1,800
(2,119
)
Income tax provision
153
474
327
Net income (loss)
$
(1,219
)
$
1,326
$
(2,446
)
Per share data: Basic: Net income (loss)
$
(0.06
)
$
0.06
$
(0.11
)
Weighted average number of shares
22,158
21,981
21,793
Diluted: Net income (loss)
$
(0.06
)
$
0.06
$
(0.11
)
Weighted average number of shares
22,158
22,811
21,793
Segment data: Net revenue: North
American Staffing
$
191,196
$
190,875
$
184,216
International Staffing
26,018
26,814
24,013
North American MSP
9,709
10,021
9,669
Corporate and Other
78
99
119
Eliminations
(73
)
-
(59
)
Net revenue
$
226,928
$
227,809
$
217,958
Operating income (loss): North American Staffing
$
6,575
$
9,064
$
6,175
International Staffing
868
1,419
382
North American MSP
973
706
532
Corporate and Other
(8,913
)
(8,862
)
(8,817
)
Operating income (loss)
$
(497
)
$
2,327
$
(1,728
)
Work days
59
64
59
Condensed Consolidated Statements of Cash Flows
(in thousands) (unaudited) Three Months Ended
January 30, 2022 January 31, 2021 Cash,
cash equivalents and restricted cash beginning of the period
$
76,609
$
56,433
Cash provided by all other operating activities
3,581
2,392
Changes in operating assets and liabilities
(15,497
)
(8,891
)
Net cash used in operating activities
(11,916
)
(6,499
)
Purchases of property, equipment, and software
(797
)
(959
)
Net cash provided by (used in) all other investing activities
156
(4
)
Net cash used in investing activities
(641
)
(963
)
Debt issuance costs
-
(161
)
Net cash used in all other financing activities
(16
)
(5
)
Net cash used in financing activities
(16
)
(166
)
Effect of exchange rate changes on cash, cash equivalents
and restricted cash
(597
)
(13
)
Net decrease in cash, cash equivalents and restricted
cash
(13,170
)
(7,641
)
Cash, cash equivalents and restricted cash end of the
period
$
63,439
$
48,792
Cash paid during the period: Interest
$
422
$
484
Income taxes
$
85
$
8
Reconciliation of cash, cash equivalents and restricted
cash end of the period: Current Assets: Cash and cash
equivalents
$
54,864
$
40,062
Restricted cash included in Restricted cash and short term
investments
8,575
8,730
Cash, cash equivalents and restricted cash, at end of period
$
63,439
$
48,792
Condensed Consolidated Balance Sheets
(in thousands, except share amounts) January 30, 2022
October 31, 2021 (unaudited) ASSETS CURRENT
ASSETS: Cash and cash equivalents
$
54,864
$
71,373
Restricted cash and short-term investments
11,587
8,729
Trade accounts receivable, net of allowances of $148 and $137,
respectively
129,303
127,211
Other current assets
6,486
6,229
TOTAL CURRENT ASSETS
202,240
213,542
Property, equipment and software, net
16,253
17,482
Right of use assets - operating leases
22,025
22,496
Other assets, excluding current portion
6,537
6,584
TOTAL ASSETS
$
247,055
$
260,104
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT
LIABILITIES: Accrued compensation
$
21,811
$
22,629
Accounts payable
36,649
36,544
Accrued taxes other than income taxes
32,486
31,112
Accrued insurance and other
17,573
16,298
Operating lease liabilities
7,052
6,775
Income taxes payable
1,012
956
TOTAL CURRENT LIABILITIES
116,583
114,314
Accrued insurance and other, excluding current portion
8,877
21,832
Operating lease liabilities, excluding current portion
32,434
33,558
Long-term debt
59,384
59,307
TOTAL LIABILITIES
217,278
229,011
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 - 22,099,246 shares
2,374
2,374
Paid-in capital
80,827
80,062
Accumulated deficit
(33,427
)
(32,208
)
Accumulated other comprehensive loss
(7,111
)
(6,249
)
Treasury stock, at cost; 1,638,757 shares
(12,886
)
(12,886
)
TOTAL STOCKHOLDERS' EQUITY
29,777
31,093
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
247,055
$
260,104
GAAP to Non-GAAP Reconciliations (in thousands)
Three Months Ended January 30, 2022 January
31, 2021 Reconciliation of GAAP net loss to Non-GAAP net
loss: GAAP net loss
$
(1,219
)
$
(2,446
)
Restructuring and severance costs
591
(a)
632
(a) Impairment Costs
23
31
Non-GAAP net loss
$
(605
)
$
(1,783
)
Three Months Ended January 30, 2022 January
31, 2021 Reconciliation of GAAP net loss to Adjusted
EBITDA: GAAP net loss
$
(1,219
)
$
(2,446
)
Restructuring and severance costs
591
(a)
632
(a) Impairment Costs
23
31
Depreciation and amortization
2,032
1,705
Share-based compensation expense
765
226
Total other (income) expense, net
569
391
Provision for income taxes
153
327
Adjusted EBITDA
$
2,914
$
866
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 exited in fiscal 2020.
GAAP to Non-GAAP
Reconciliations
(in thousands) Three Months EndedJanuary 30,
2022 Three Months Ended January 31, 2021 As
Reported As Reported FX Impact Adjusted
Revenue North American Staffing
$
191,196
$
184,216
$
-
$
184,216
International Staffing
26,018
24,013
(842
)
23,171
North American MSP
9,709
9,669
-
9,669
Corporate and Other
78
119
-
119
Eliminations
(73
)
(59
)
-
(59
)
Total Revenue
$
226,928
$
217,958
$
(842
)
$
217,116
% change
4.5
%
GAAP to Non-GAAP
Reconciliations
(in thousands, except per share data) Three Months
Ended January 30, 2022 Three Months Ended January 31,
2021 As Reported RestructuringandImpairmentCosts
Adjusted As Reported
RestructuringandImpairmentCosts Adjusted Earnings
per Share Net income (loss)
$
(1,219
)
$
614
)
$
(605
)
$
(2,446
)
$
663
)
$
(1,783
)
Per share data: Basic: Net income (loss)
$
(0.06
)
$
(0.03
)
$
(0.11
)
$
(0.08
)
Weighted average number of shares
22,158
22,158
21,793
21,793
Diluted Net income (loss)
$
(0.06
)
$
(0.03
)
$
(0.11
)
$
(0.08
)
Weighted average number of shares
22,158
22,158
21,793
21,793
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220315005214/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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