Volt Information Sciences Announces First Quarter Results.
NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Volt Information Sciences, Inc. (NYSE NYSE
See: New York Stock Exchange : VOL VOL Volume
VOL Volvo (stock symbol)
VOL Verdingungsordnung für Leistungen (German)
VOL Volatile Organic Liquid
Vol Volscan (linguistics) ) today reported financial results for the Company's first quarter ended January January: see month. 29, 2006.
Volt will conduct a conference call webcast at 11:00 A.M. (EST EST electroshock therapy.
electroshock therapy ) today to discuss first quarter results. The conference call dial-in number is 1-888-469-0571 (Domestic) or 1-517-623-4001 (International), passcode: First Quarter. The conference call will be broadcast live over the Internet Internet
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed for the next 30 days at htpp://www.volt.com/investor/press_release.cfm
FIRST QUARTER RESULTS
Attached is a summary of the Company's results of operations and notes thereto there·to
1. To that, this, or it.
2. Archaic In addition to that; furthermore.
1. to that or it
2. . The notes are an integral part of the summary.
For the fiscal 2006 first quarter, ended January 29, 2006, the Company reported a net loss of $0.4 million, or $0.02 per share, compared to a net loss of $0.8 million, or $0.05 per share in the fiscal 2005 first quarter. Net sales Net Sales
The amount a seller receives from the buyer after costs associated with the sale are deducted.
This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight increased by 10% to $549.5 million, compared to $497.8 million in last year's comparable quarter. Income before minority interest and income taxes increased to $0.4 million in the quarter compared to $0.2 million in the comparable fiscal 2005 quarter.
Segment operating profit Operating profit (or loss)
Revenue from a firm's regular activities less costs and expenses and before income deductions.
See operating income. increased 41% to $13.6 million in the fiscal 2006 first quarter compared to $9.6 million in the 2005 first quarter. This increase was offset by a $3.6 million increase in general corporate expenses, primarily the result of increased audit and Sarbanes-Oxley compliance charges related to the 2005 fiscal year.
As previously announced, the Company's subsidiary, Volt Delta Resources LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control , purchased from Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony Inc. its 24% minority interest in Volt Delta on December December: see month. 29, 2005 and acquired varetis AG's subsidiary, Varetis Solutions GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) on December 30, 2005.
The Company stated that the strong growth in segment operating profit and revenue occurred in what is a historically flat quarter due to the number of holidays and associated customer closings. Of particular note is the significant improvement in results over the 2005 first quarter for the Telecommunications Services In telecommunication, the term telecommunications service has the following meanings:
1. Any service provided by a telecommunication provider.
2. segment and the Administrative and Industrial division of the Staffing Services segment. While overall results were negatively impacted by the material expenses incurred related to Sarbanes-Oxley and audit fees for the 2005 fiscal year, the Company expects that these charges will be reduced in the future.
Net sales for this segment increased by 9% to $457.6 million compared to the fiscal 2005 first quarter, while operating profit increased to $4.8 million from $2.5 million. The increase in operating profit was the result of increased permanent placement revenue in both the Technical and Administrative and Industrial divisions and a $1.8 million reduction in workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. costs, which more than offset lower profitability of the VMC See VESA Media Channel. Consulting division.
Net sales for this segment were $41.3 million, approximately ap·prox·i·mate
1. Almost exact or correct: the approximate time of the accident.
2. the same as the comparable prior year's quarter; however, operating profit decreased by 24% to $5.7 million due to increased overhead. The quarter includes the results of one month of Varetis Solutions GmbH, which was acquired on December 30, 2005.
This segment reported an operating profit of $2.3 million on sales of $15.8 million, approximately the same results as the fiscal 2005 first quarter.
This segment continued to improve as sales increased by 59% to $40.1 million compared to the fiscal 2005 first quarter. Included in the quarter was the recognition of $10.8 million in revenue due to the completion of a construction project. The segment reported an operating profit of $0.8 million in the fiscal 2006 first quarter compared to an operating loss operating loss
The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $2.4 million in the comparable prior year's period. All divisions in this segment produced improved results over the 2005 quarter, primarily the result of reduced overhead expense as a percentage of revenue achieved through the reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. of the segment.
GENERAL CORPORATE EXPENSES
General corporate expenses increased by $3.6 million or 43% as a result of higher professional fees and other costs related to compliance with the Sarbanes-Oxley Act See SOX. .
Cash and cash equivalents, excluding restricted cash, decreased to $46.6 million at January 29, 2006 from $62.0 million at October October: see month. 30, 2005. At January 29, 2006, the Company had sold a continuing participating interest in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying of $100.0 million under its securitization Securitization
The process of creating a financial instrument by combining other financial assets and then marketing them to investors.
Mortgage backed securities are a perfect example of securitization.
May also be spelled as "securitisation. program and as of January 29, 2006 had the ability to finance up to an additional $100.0 million under the facility which expires in April 2008.
In addition, the Company may borrow Borrow
To obtain or receive money on loan with the promise or understanding that it will be repaid. under a $40.0 million revolving credit Revolving Credit
A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, under which borrowings are limited by a specific borrowing base. At January 29, 2006, the Company had borrowed 2.0 million Euros ($2.4 million) under this facility.
In December 2005, Volt Delta paid approximately $50.0 million, principally from cash on hand, for the Nortel Networks and Varetis Solutions transactions. The remaining $36.8 million was paid on February February: see month. 15, 2006 and was financed by increasing the receivables Receivables
An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed sold under the securitization program to $140.0 million from $100.0 million.
Volt Information Sciences, Inc. is a leading national provider of Staffing Services and Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and Information Solutions with a Fortune 100 customer base. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services A variety of telephone services that require human intervention, including person-to-person calls, collect calls, credit card billing and directory and dialing assistance. Such services are performed by LECs, IXCs and alternative operator services (AOS), organizations that are used by systems for telephone companies. For additional information, please visit Volt's web site at http://www.volt.com.
This press release contains forward-looking statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. which are subject to a number of known and unknown risks, including general economic, competitive and other business conditions, the degree and timing of customer utilization utilization,
n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be and the rate of renewals of contracts with the Company, that could cause actual results, performance and achievements to differ materially from those described or implied Inferred from circumstances; known indirectly.
In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 is contained in Company reports filed with the Securities and Exchange Commission. Copies of the Company's latest Annual Report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. and subsequent Quarterly Reports on Form 10-Q Form 10-Q
See 10-Q. , as filed with the Securities and Exchange Commission and the New York Stock Exchange New York Stock Exchange (NYSE)
World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , are available without charge upon request to Volt Information Sciences, Inc., 560 Lexington Lexington.
1 City (1990 pop. 225,366), seat of Fayette co., N central Ky., in the heart of the bluegrass region; inc. 1832, made coextensive with Fayette co. 1974. Avenue, New York, New York 10022, 212-704-2400, 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 http://www.sec.gov See .gov and GovNet.
(networking) gov - The top-level domain for US government bodies. and at the Company's website at http://www.volt.com in the Investor Information section.
VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF OPERATIONS (UNAUDITED) FIRST QUARTER ENDED January 29, January 30, 2006 2005 ----------- ----------- (In thousands, except per share amounts) Net sales $549,508 $497,835 =========== =========== Income before minority interest and income taxes $437 $208 Minority interest - Note A (1,021) (1,494) ----------- ----------- Loss before income taxes (584) (1,286) Income tax benefit 207 478 ----------- ----------- Net loss ($377) ($808) =========== =========== Per Share Data Net loss per share-basic and diluted ($0.02) ($0.05) =========== =========== Weighted average number of shares outstanding- basic 15,343 15,291 =========== =========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) FIRST QUARTER ENDED January 29, January 30, 2006 2005 ----------- ----------- (Dollars in thousands) Net Sales --------- Staffing Services-Note B Traditional staffing $445,627 $414,094 Managed services 251,076 297,432 ----------- ----------- Total gross sales 696,703 711,526 Less non-recourse managed services (239,061) (291,193) ----------- ----------- Net Staffing Services sales 457,642 420,333 Telephone Directory 15,785 15,704 Telecommunications Services 40,114 25,204 Computer Systems 41,274 41,194 Elimination of intersegment sales (5,307) (4,600) ----------- ----------- Total Net Sales $549,508 $497,835 =========== =========== Income (loss) before Minority Interest and Income Taxes: ------------------------------------------- Staffing Services $4,829 $2,453 Telephone Directory 2,261 2,107 Telecommunications Services 768 (2,429) Computer Systems 5,749 7,514 ----------- ----------- Total segment operating profit 13,607 9,645 Interest income and other (expense) income, net (573) (456) General corporate expenses (11,888) (8,307) Interest expense (456) (512) Foreign exchange loss, net (253) (162) ----------- ----------- Income before Minority Interest and Income Taxes $437 $208 =========== =========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) January 29, October 30, 2006 2005 ----------- ----------- Assets (Dollars in thousands) Current Assets Cash and cash equivalents, including restricted cash of $22,532 (2006) and $26,131 (2005)-Note B $69,123 $88,119 Short-term investments 4,265 4,213 Trade receivables, net-Note C 361,065 399,677 Inventories 36,127 33,758 Recoverable income taxes 1,641 - Deferred income taxes 10,653 10,246 Prepaid and other assets 24,610 19,788 ----------- ----------- Total Current Assets 507,484 555,801 Property, plant and equipment, net 83,387 83,272 Deposits and other assets 1,881 2,102 Goodwill 52,085 32,623 Other intangible assets, net 33,777 14,914 ----------- ----------- Total Assets $678,614 $688,712 =========== =========== Liabilities and Stockholders' Equity Current Liabilities Notes payable to bank $6,621 $6,622 Note payable to Nortel-Note A 36,750 - Current portion of long-term debt 2,442 2,404 Accounts payable 155,812 172,788 Accrued wages and commissions 53,127 55,081 Accrued taxes other than income taxes 23,481 17,586 Accrued insurance and other accruals 34,992 35,173 Deferred income and other liabilities 42,018 30,628 Income taxes payable - 1,686 ----------- ----------- Total Current Liabilities 355,243 321,968 Accrued insurance 1,467 1,630 Long-term debt 13,183 13,297 Deferred income taxes 12,858 13,358 Minority interest-Note A 43,444 Stockholders' Equity 295,863 295,015 ----------- ----------- Total Liabilities and Stockholders' Equity $678,614 $688,712 =========== =========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) A - In December 2005, Volt Delta Resources, LLC ("Volt Delta"), the principal business unit of the Computer Systems segment, purchased from Nortel Networks, Inc. ("Nortel Networks") its 24% minority interest in Volt Delta for $62.0 million, including an excess cash distribution of $5.4 million. Nortel Networks had originally purchased its 24% interest in August of 2004, and under the terms of the original purchase agreement, each party had an option to cause Nortel Networks to sell and Volt Delta to buy the minority interest for an amount ranging from $25.0 million to $70.0 million. During the quarter, Volt Delta also purchased Varetis Solutions GmbH ("Varetis Solutions") from varetis AG for $24.8 million. The acquisition allows Volt Delta to combine resources to focus on the evolving global market for directory information systems and services. Varetis Solutions adds technology in the area of wireless and wireline database management, directory assistance/inquiry automation and wireless handset information delivery to Volt Delta's significant technology portfolio. The preliminary allocation of the purchase price of the transactions resulted in $19.5 million of goodwill and $19.3 million of intangible assets. B - Under certain contracts with customers, the Company manages the customers' alternative staffing requirements, including transactions between the customer and other staffing vendors ("associate vendors"). When payments to associate vendors are subject to the receipt of the customers' payment to the Company, the arrangements are considered non-recourse against the Company and revenue, other than management fees to the Company, is excluded from sales. Cash restricted to cover such obligations is included in cash and cash equivalents on the January 29, 2006 and October 30, 2005 balance sheets. C - Under a securitization program, the receivables related to the staffing solutions business of the Company are sold from time-to-time by the Company, through a 100%-owned consolidated special purpose subsidiary to an unaffiliated third party. The outstanding balance of the participation interest sold was $100.0 million at January 29, 2006 and October 30, 2005. Accordingly, the trade receivables included on the January 29, 2006 and October 30, 2005 balance sheets have been reduced to reflect the $100.0 million participation interest sold.