Exhibit 99.1

 

Volt Information Sciences, Inc. Reports Second Quarter

Fiscal 2021 Financial Results

 

Reports Year-Over-Year Revenue Growth and Positive Net Income

 

Orange, CA, June 15, 2021 -- (BUSINESS WIRE) -- Volt Information Sciences, Inc. (“Volt” or the “Company”) (NYSE-AMERICAN: VOLT) a global provider of staffing services, today announced financial results for the second quarter ended May 2, 2021.

Second Quarter Summary

·Revenue was $222.1 million, a 7.1% increase compared to the second quarter of fiscal 2020; Adjusted Revenue* increased 5.9%.
·Gross margin increased 80 basis points year-over-year to 16.4%.
·GAAP operating income was $2.7 million, a $7.1 million improvement compared to the prior-year quarter; Adjusted Operating Income*, excluding impairment and restructuring charges, was $3.5 million.
·GAAP EPS was $0.08 per diluted share compared to a loss of ($0.25) per share in the second quarter of fiscal 2020; Adjusted EPS* was $0.12 per diluted share.
·Adjusted EBITDA* increased $7.4 million year over year to $6.0 million.

* Adjusted Revenue, Adjusted Operating Income (Loss), Adjusted EPS and Adjusted EBITDA are Non-GAAP measures described and defined below.

“I remain encouraged by our continued momentum and performance this quarter. Despite experiencing significant weather-related impacts in February of this year and the first seven weeks of operations in the prior-year quarter being pre-COVID, we reported sequential and year-over-year improvement in our operating results,” said Linda Perneau, President and Chief Executive Officer. “Thanks to the continued execution of our improved sales and delivery model, and our disciplined cost management, this quarter reflects our strongest year-over-year revenue growth in a decade, and our first positive GAAP net income in 14 quarters.”

Second Quarter Results

North American Staffing revenue for the quarter was $184.3 million, as compared to $173.4 million for the second quarter of fiscal 2020. Revenue for this segment increased approximately 6.3 percent year-over-year. The increase is primarily attributable to business wins with new clients and expansion of business within existing clients.

International Staffing revenue for the quarter was $27.9 million, compared to $24.3 million in the prior-year quarter. Adjusted Revenue increased 4.3 percent year-over-year. The increase is primarily due to increased managed service business and direct hire revenue in the United Kingdom and staffing business in France.

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North American MSP revenue for the second quarter was $9.8 million, compared to $9.7 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 16.4 percent of revenue, an 80 basis-point increase from the second 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 second quarter was $33.0 million, a $3.2 million reduction from the prior-year quarter. The reduction is primarily attributable to lower labor and related expenses, facility costs and professional fees.

Adjusted EBITDA, which is a Non-GAAP measure, was $6.0 million for the second quarter of fiscal 2021, compared to ($1.4) million in the prior-year quarter.

“Although the pandemic continues to present a number of challenges across our business, we have emerged as a stronger organization overall,” commented Ms. Perneau. “We remain confident in the continued execution of our strategic initiatives and our ability to remain on the current growth trajectory for fiscal 2021.”

2021 Earnings Conference Call and Webcast

Volt Information Sciences, Inc. will conduct a conference call on Tuesday, June 15, 2021, at 5:00 p.m. Eastern Time, to review the financial results for the second quarter ended May 2, 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.

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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.

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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.

 

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Investor Relations Contacts:
Volt Information Sciences, Inc.
voltinvest@volt.com

Joe Noyons
Three Part Advisors
jnoyons@threepa.com

817-778-8424

 

Financial Tables Follow

 

 

 

 

 

 

 

 

 

 

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Results of Operations                   
(in thousands, except per share data)        
   Three Months Ended  Six Months Ended
   May 2, 2021  January 31, 2021  May 3, 2020  May 2, 2021  May 3, 2020
                
Net revenue  $222,092   $217,958   $207,275   $440,050   $425,041 
Cost of services   185,613    185,276    175,038    370,889    361,377 
Gross margin   36,479    32,682    32,237    69,161    63,664 
                          
Selling, administrative and other operating costs   32,950    33,747    36,189    66,697    75,686 
Restructuring and severance costs   595    632    411    1,227    1,657 
Impairment charges   261    31    —      292    11 
Operating income (loss)   2,673    (1,728)   (4,363)   945    (13,690)
                          
Interest income (expense), net   (430)   (477)   (621)   (907)   (1,321)
Foreign exchange gain (loss), net   71    242    (266)   313    (594)
Other income (expense), net   (147)   (156)   (152)   (303)   (410)
Income (loss) before income taxes   2,167    (2,119)   (5,402)   48    (16,015)
Income tax provision   288    327    23    615    218 
Net income (loss)  $1,879   $(2,446)  $(5,425)  $(567)  $(16,233)
                          
Per share data:                         
Basic:                         
Net income (loss)  $0.09   $(0.11)  $(0.25)  $(0.03)  $(0.76)
Weighted average number of shares   21,793    21,793    21,416    21,793    21,416 
                          
Diluted:                         
Net income (loss)  $0.08   $(0.11)  $(0.25)  $(0.03)  $(0.76)
Weighted average number of shares   22,588    21,793    21,416    21,793    21,416 
                          
Segment data:                         
                          
Net revenue:                         
North American Staffing  $184,295   $184,216   $173,386   $368,511   $355,781 
International Staffing   27,880    24,013    24,303    51,893    50,526 
North American MSP   9,832    9,669    9,745    19,501    19,114 
Corporate and Other   117    119    187    236    390 
Eliminations   (32)   (59)   (346)   (91)   (770)
Net revenue  $222,092   $217,958   $207,275   $440,050   $425,041 
                          
Operating income (loss):                         
North American Staffing  $9,471   $6,175   $2,576   $15,646   $2,675 
International Staffing   1,097    382    196    1,479    570 
North American MSP   309    532    491    841    1,245 
Corporate and Other   (8,204)   (8,817)   (7,626)   (17,021)   (18,180)
Operating income (loss)  $2,673   $(1,728)  $(4,363)  $945   $(13,690)
                          
Work days   65    59    65    124    124 

 

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Condensed Consolidated Statements of Cash Flows
(in thousands)
   Six Months Ended
   May 2, 2021  May 3, 2020
       
Cash, cash equivalents and restricted cash beginning of the period  $56,433   $38,444 
           
Cash provided by (used in) all other operating activities   9,161    (7,161)
Changes in operating assets and liabilities   (7,349)   10,071 
Net cash provided by operating activities   1,812    2,910 
           
Purchases of property, equipment, and software   (1,755)   (3,092)
Net cash provided by (used in) all other investing activities   (40)   615 
Net cash used in investing activities   (1,795)   (2,477)
           
   Net draw-down of borrowings   —      5,000 
Debt issuance costs   (166)   (243)
Net cash provided by (used in) all other financing activities   23    (6)
Net cash (used in) provided by financing activities   (143)   4,751 
           
Effect of exchange rate changes on cash, cash equivalents and restricted cash   281    (521)
           
Net increase in cash, cash equivalents and restricted cash   155    4,663 
           
Cash, cash equivalents and restricted cash end of the period  $56,588   $43,107 
           
Cash paid during the period:          
Interest  $917   $1,382 
Income taxes  $142   $258 
           
Reconciliation of cash, cash equivalents and restricted cash end of the period:          
Current Assets:          
Cash and cash equivalents  $47,231   $26,223 
Restricted cash included in Restricted cash and short term investments   9,357    16,884 
Cash, cash equivalents and restricted cash, at end of period  $56,588   $43,107 

 

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Condensed Consolidated Balance Sheets
(in thousands, except share amounts) 
   May 2, 2021  November 1, 2020
ASSETS          
CURRENT ASSETS:          
Cash and cash equivalents  $47,231   $38,550 
Restricted cash and short-term investments   12,788    20,736 
Trade accounts receivable, net of allowances of $156 and $219, respectively   127,435    121,916 
Other current assets   7,567    7,058 
TOTAL CURRENT ASSETS   195,021    188,260 
Property, equipment and software, net   20,180    22,167 
Right of use assets - operating leases   23,513    25,107 
Other assets, excluding current portion   6,633    6,311 
TOTAL ASSETS  $245,347   $241,845 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
CURRENT LIABILITIES:          
Accrued compensation  $18,630   $18,357 
Accounts payable   24,793    31,221 
Accrued taxes other than income taxes   31,828    12,983 
Accrued insurance and other   17,710    15,908 
Operating lease liabilities   6,817    7,144 
Income taxes payable   515    891 
TOTAL CURRENT LIABILITIES   100,293    86,504 
Accrued payroll taxes and other, excluding current portion   21,237    29,988 
Operating lease liabilities, excluding current portion   35,424    38,232 
Income taxes payable, excluding current portion   90    90 
Deferred income taxes   —      3 
Long-term debt   59,153    59,154 
TOTAL LIABILITIES   216,197    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 - 21,736,575 and 21,729,400 shares, respectively   2,374    2,374 
Paid-in capital   80,673    79,937 
Accumulated deficit   (30,505)   (29,793)
Accumulated other comprehensive loss   (5,367)   (6,458)
Treasury stock, at cost; 2,001,428 and 2,008,603 shares, respectively   (18,025)   (18,186)
TOTAL STOCKHOLDERS' EQUITY   29,150    27,874 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $245,347   $241,845 

 

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GAAP to Non-GAAP Reconciliations
(in thousands)
       
   Three Months Ended
   May 2, 2021  May 3, 2020
Reconciliation of GAAP net income (loss) to Non-GAAP net income (loss):      
GAAP net income (loss)  $1,879   $(5,425)
  Restructuring and severance costs   595(a)   411(c)
  Impairment costs   261(b)   —   
Non-GAAP net income (loss)  $2,735   $(5,014)
           
    Three Months Ended 
    May 2, 2021    May 3, 2020 
Reconciliation of GAAP net income (loss) to Adjusted EBITDA:          
GAAP net income (loss)  $1,879   $(5,425)
  Restructuring and severance costs   595(a)   411(c)
  Impairment costs   261(b)   —   
  Depreciation and amortization   1,951    2,027 
  Share-based compensation expense   531    508 
  Total other (income) expense, net   506    1,039 
  Provision for income taxes   288    23 
Adjusted EBITDA  $6,011   $(1,417)

 

               
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) Relates to impairment of capitalized software costs.            
(c) 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.

 

GAAP to Non-GAAP Reconciliations
(in thousands)
       
   Six Months Ended
   May 2, 2021  May 3, 2020
Reconciliation of GAAP net loss to Non-GAAP net income (loss):      
GAAP net loss  $(567)  $(16,233)
  Restructuring and severance costs   1,227(a)   1,657(c)
  Impairment costs   292(b)   11 
Non-GAAP net income (loss)  $952   $(14,565)
           
    Six Months Ended 
    May 2, 2021    May 3, 2020 
Reconciliation of GAAP net loss to Adjusted EBITDA:          
GAAP net loss  $(567)  $(16,233)
  Restructuring and severance costs   1,227(a)   1,657(c)
  Impairment costs   292(b)   11 
  Depreciation and amortization   3,656    4,000 
  Share-based compensation expense   757    1,019 
  Total other (income) expense, net   897    2,325 
  Provision for income taxes   615    218 
Adjusted EBITDA  $6,877   $(7,003)
               
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.

 

GAAP to Non-GAAP Reconciliations
(in thousands)
                
   Three Months Ended May 2, 2021  Three Months Ended May 3, 2020
   As Reported  As Reported  FX Impact  MSP Delivery Model Shift  Adjusted
Revenue               
North American Staffing  $184,295   $173,386   $—     $—     $173,386 
International Staffing   27,880    24,303    2,432    —      26,735 
North American MSP   9,832    9,745    —      —      9,745 
Corporate and Other   117    187         —      187 
Eliminations   (32)   (346)   —      —      (346)
Total Revenue  $222,092   $207,275   $2,432   $—     $209,707 
% change                       5.9%
                          
    

Six Months Ended

May 2, 2021

   Six Months Ended May 3, 2020
    As Reported    As Reported   FX impact   MSP Delivery Model Shift   Adjusted
Revenue                         
North American Staffing  $368,511   $355,781   $—     $(2,072)  $353,709 
International Staffing   51,893    50,526    3,787         54,313 
North American MSP   19,501    19,114    —      52    19,166 
Corporate and Other   236    390    —      —      390 
Eliminations   (91)   (770)   —      —      (770)
Total Revenue  $440,050   $425,041   $3,787   $(2,020)  $426,808 

 

GAAP to Non-GAAP Reconciliations
(in thousands)
                   
   Three Months Ended May 2, 2021  Three Months Ended May 3, 2020
   As Reported  Business Exited  Adjusted  As Reported  Business Exited  Adjusted
Operating Income (Loss)                              
North American Staffing  $9,471   $—     $9,471   $2,576   $—     $2,576 
International Staffing   1,097    —      1,097    196    —      196 
North American MSP   309    —      309    491    —      491 
Corporate and Other   (8,204)   1    (8,203)   (7,626)   (45)   (7,671)
Total Operating Income (Loss)  $2,673   $1   $2,674   $(4,363)  $(45)  $(4,408)
                               
    Six Months Ended May 2, 2021   Six Months Ended May 3, 2020
    As Reported   Business Exited   Adjusted   As Reported   Business Exited   Adjusted
Operating Income (Loss)                              
North American Staffing  $15,646   $—     $15,646   $2,675   $—     $2,675 
International Staffing   1,479    —      1,479    570    —      570 
North American MSP   841    —      841    1,245    —      1,245 
Corporate and Other   (17,021)   1    (17,020)   (18,180)   (13)   (18,193)
Total Operating Income (Loss)  $945   $1   $946   $(13,690)  $(13)  $(13,703)

 

GAAP to Non-GAAP Reconciliations

(in thousands)

                   
   Three Months Ended May 2, 2021  Three Months Ended May 3, 2020
   As Reported  Business Exited  Adjusted  As Reported  Business Exited  Adjusted
Operating Income (Loss)                              
Gross margin  $36,479   $—     $36,479   $32,237   $—     $32,237 
Selling, administrative and other operating costs   32,950    —      32,950    36,189    —      36,189 
Restructuring and severance costs   595    (1)   594    411    45    456 
Impairment charges   261    —      261    —      —      —   
Total Operating Income (Loss)  $2,673   $(1)  $2,674   $(4,363)  $(45)  $(4,408)
                               
    Six Months Ended May 2, 2021   Six Months Ended May 3, 2020
    As Reported   Business Exited   Adjusted   As Reported   Business Exited   Adjusted
Operating Income (Loss)                              
Gross margin  $69,161   $—     $69,161   $63,664   $—     $63,664 
Selling, administrative and other operating costs   66,697    —      66,697    75,686    —      75,686 
Restructuring and severance costs   1,227    (1)   1,226    1,657    13    1,670 
Impairment charges   292    —      292    11    —      11 
Total Operating Income (Loss)  $945   $(1)  $946   $(13,690)  $(13)  $(13,703)

 

GAAP to Non-GAAP Reconciliations
(in thousands, except per share data)
          
   Three Months Ended May 2, 2021
   As Reported  Restructuring and Impairment Costs  Adjusted
Earnings per Share         
Net income  $1,879   $856   $2,735 
                
Per share data:               
Basic:               
Net income  $0.09        $0.13 
Weighted average number of shares   21,793         21,793 
                
Diluted               
Net income  $0.08        $0.12 
Weighted average number of shares   22,588         22,588 

 

   Six Months Ended May 2, 2021
   As Reported  Restructuring and Impairment Costs  Adjusted
Earnings per Share         
Net income (loss)  $(567)  $1,519   $952 
                
Per share data:               
Basic:               
Net income (loss)  $(0.03)       $0.04 
Weighted average number of shares   21,793         21,793 
                
Diluted               
Net income (loss)  $(0.03)       $0.04 
Weighted average number of shares   21,793         21,793 

 

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