Volt Information Sciences Reports 2018 Third Quarter Financial Results
NEW YORK--(BUSINESS WIRE)--Sep 6, 2018--Volt Information Sciences, Inc. (“Volt” or “the Company”) (NYSE-AMERICAN: VISI), an international provider of staffing services and managed service programs, today reported results for its 2018 third quarter ended July 29, 2018. Key highlights include:Third quarter net revenue of $257.8 million, down 11.1% year-over-year; on a same-store basis, net revenue declined 6.6% year-over-year excluding net revenue contributed from businesses sold or exited during the past year and the effect of foreign exchange rate fluctuations; Third quarter selling, administrative and other operating costs of $42.2 million, down 10.0%, year-over-year, or 5.4% excluding businesses sold or exited during the past year; Global liquidity of $52.7 million at quarter-end, up $19.3 million year-over-year; total outstanding debt of $50.0 million, down $50.0 million year-over-year; Linda Perneau appointed Interim Chief Executive Officer, in addition to her role as President of Volt Workforce Solutions (VWS); Re-aligned the organizational structure of Volt Workforce Solutions in order to strengthen the Company’s focus on sales and service delivery across its spectrum of offerings; and Continuation of the review of strategic alternatives by the Company’s Board of Directors
“I see significant opportunities to enhance Volt’s competitive position within the staffing industry and improve performance to levels of which we can be proud,” said Linda Perneau, Interim Chief Executive Officer and President of Volt Workforce Solutions. “Key to achieving this will be returning our largest business, Volt Workforce Solutions, to a trajectory of profitable growth. To address the challenges, our leadership team is currently focused on four strategic priorities of organization design, business optimization, delivery excellence and growth and expansion. While it is clear that we have a lot of work ahead of us, I am encouraged by the progress we have made so far during my short tenure at Volt. As we execute on our initiatives, I look forward to driving significantly enhanced value for all of our stakeholders in the future.”
Fiscal 2018 Third Quarter Results
Total revenue for the fiscal 2018 third quarter was $257.8 million, down $32.1 million, or 11.1%, compared to $289.9 million in the third quarter of fiscal 2017. On a same-store basis, net revenue declined 6.6% year-over-year excluding net revenue contributed from businesses sold or exited during the past year and the effect of currency fluctuations.
North American Staffing revenue, which includes a broad spectrum of contingent staffing, direct placement, recruitment process outsourcing and other employment services, was $215.7 million, a $13.7 million, or 6.0% decline compared to North American Staffing revenue of $229.4 million in the third quarter of fiscal 2017. The decline was driven by lower demand from customers in the professional and administrative and office job categories, partially offset by growth in the light industrial and engineering job categories.
International Staffing revenue, which includes the Company’s contingent staffing, direct placement and managed service programs businesses in Europe and Asia, was $28.6 million, a $0.4 million, or 1.5% decrease compared to $29.0 million from the third quarter of fiscal 2017. Excluding the positive impact of foreign exchange rate fluctuations of $0.9 million offset by a decrease related to business exited of $0.8 million, revenue declined $0.5 million, or 1.8%, compared to the third quarter of fiscal 2017, primarily due to lower demand in the United Kingdom, offset by strong growth in Belgium.
Corporate and Other revenue, which primarily consists of the Company’s North American managed service business and the Company’s call center business, was $14.4 million, down $19.0 million, or 56.8%, compared to $33.4 million in the third quarter of fiscal 2017. The year-over-year revenue decline was primarily driven by the impact from the sale of the Company’s quality assurance business which occurred at the end of the fourth quarter of fiscal 2017. On a same-store basis, excluding the business sold of $14.1 million, Corporate and Other revenue decreased $4.9 million, or 25.2%, year-over-year, as a result of winding down of certain customer programs in the Company’s managed service business as well as normal fluctuations in call center activity.
Selling, administrative and other operating costs in the third quarter of fiscal 2018 decreased $4.7 million, or 10.0%, to $42.2 million from $46.9 million in the third quarter of fiscal 2017. This decrease was primarily due to on-going cost reductions in all areas of the business, including a $2.9 million reduction in labor costs and a $1.2 million reduction in share-based compensation expense, as well as costs from the previously-owned quality assurance business of $2.3 million. The third quarter of fiscal 2017 also included the release of a reserve related to the dissolution of the Employee Welfare Benefit Trust of $1.4 million.
Net loss was $11.4 million in the third quarter of fiscal 2018, up $5.9 million compared to a loss of $5.5 million in the third quarter of fiscal 2017. Adjusted net loss, which is a Non-GAAP measure, was $8.8 million in the third quarter of fiscal 2018, up $3.0 million compared to an adjusted net loss of $5.8 million in the third quarter of fiscal 2017. For a reconciliation of the GAAP and Non-GAAP financial results, please see the tables at the end of this press release.
Adjusted EBITDA, which is a Non-GAAP measure, was a loss of $5.0 million in the fiscal 2018 third quarter, down $6.4 million from income of $1.4 million in the year ago period. Adjusted EBITDA excludes the impact of special items, interest expense, income taxes, depreciation and amortization expense, other income/loss and share-based compensation expense. For a reconciliation of the GAAP and Non-GAAP financial results, please see the tables at the end of this press release.
As of August 31, 2018, the Company had $54.1 million of global liquidity as compared to $38.9 million at September 1, 2017.
During the quarter the Company re-aligned the organizational structure of VWS to include a Specialty Solutions Group, Strategic Solutions Group and Global Solutions Group in order to strengthen VWS’ focus on sales and delivery. Chris Kelly has joined Volt as Senior Vice President, Strategic Solutions, VWS and brings over 25 years of industry experience. In her new role, Ms. Kelly will bring a greater focus to vendor-on-premise accounts, a growing segment within the staffing industry and one that represents a significant strategic opportunity for Volt.
Subsequent to the end of the quarter, the Company announced it has hired two senior executives, Lori Schultz, Chief Operating Officer, VWS and Lauren Griffin, Senior Vice President, Specialty Solutions Group, VWS, strengthening Volt’s top leadership as the Company moves forward on its growth and profitability strategies. Ms. Schultz and Ms. Griffin each join Volt with over 25 years of experience in the staffing industry.
Conference Call and Webcast
A conference call and simultaneous webcast to discuss the fiscal 2018 third quarter financial results will be held today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. Volt’s Interim Chief Executive Officer and President of Volt Workforce Solutions Linda Perneau, and Senior Vice President and Chief Financial Officer Paul Tomkins, will host the conference call. Participants may listen in via webcast by visiting the Investor & Governance section of Volt’s website at www.volt.com. Please visit the website at least 15 minutes early to register, download and install any necessary audio software. The conference call can also be accessed by dialing 877-407-9039 (201-689-8470 for international callers) and reference the “Volt Information Sciences Earnings Conference Call.”
Following the call, an audio replay will be available beginning Thursday, September 6, 2018 at 7:30 p.m. Eastern Time through Thursday, September 20, 2018 at 11:59 p.m. Eastern Time. To access the replay, dial 844-512-2921 (412-317-6671 for international callers) and enter the Conference ID #13682668. A replay of the webcast will also be available for 90 days upon completion of the call, accessible through the Company’s website at www.volt.com in the Investors & Governance section.
A copy of this earnings release and a corresponding supplemental slide presentation will be available prior to the call, accessible through the Investor Relations section of the Company’s website at www.volt.com in the Investors & Governance section.
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. Our customer care solutions specialize in serving as an extension of our customers’ consumer relationships and processes including collaborating with customers, from help desk inquiries to advanced technical support. Our complementary businesses offer customer care call centers, customized talent, and supplier management solutions to a diverse client base. 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.
This press release contains forward-looking statements that are subject to a number of known and unknown risks, including, among others, the Company’s ability to strengthen its sales and service delivery efforts, capitalize on trends in the staffing industry, increase market share and achieve sales growth 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. Copies of the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission, are available without charge upon request to Volt Information Sciences, Inc., 1133 Avenue of the Americas, New York, New York 10036, Attention: Shareholder Relations. These and other SEC filings by the Company are also available to the public over the Internet at the SEC’s website at www.sec.gov and at the Company’s website at www.volt.com in the Investors section.
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