Volt Information Sciences, Inc. Reports First Quarter Fiscal 2021 Financial Results
03/16/2021 - 04:05 PM
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 31, 2021.
First Quarter Summary
Revenue was $218.0 million , compared to $217.8 million in the first quarter of fiscal 2020; Adjusted Revenue* increased 0.4% .
Gross margin was 15.0% , a 60-basis point increase compared to the prior-year quarter.
GAAP operating loss for the quarter was ($1.7) million , a $7.6 million improvement compared to the prior-year quarter; Adjusted Operating Loss*, excluding impairment and restructuring charges, improved by $7.0 million year over year to ($1.1) million .
GAAP EPS loss was ($0.11) per share compared to ($0.50) per share in the first quarter of fiscal 2020; Adjusted EPS* was ($0.08) .
Adjusted EBITDA* increased $6.5 million year over year to $0.9 million .
* Adjusted Revenue, Adjusted Operating Income (Loss), Adjusted EPS and Adjusted EBITDA are Non-GAAP measures described and defined below.
“I am very encouraged by our results to start fiscal 2021, which were made possible through a combination of our continued response to COVID-19 and the resiliency we showed in managing our business. Our ongoing recovery is directly attributable to the never-ending hard work and dedication of all Volt employees, who continue to adapt and provide industry-leading service to our clients,” said Linda Perneau, President and Chief Executive Officer. “Despite ongoing business disruption from the pandemic, we posted year-over-year Revenue and Adjusted EBITDA growth compared to our first quarter in fiscal 2020, a pre-pandemic quarter. We also reported our third consecutive quarter of positive Adjusted EBITDA.”
First Quarter Results
North American Staffing revenue for the quarter was $184.2 million , as compared to $182.4 million for the first quarter of fiscal 2020. Adjusted Revenue, which is a Non-GAAP measure, for this segment increased approximately 2.2 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 $24.0 million , compared to $26.2 million in the prior-year quarter. Adjusted Revenue decreased 12.9 percent year over year. The decrease is primarily due to the results within our U.K. business.
North American MSP revenue for the first quarter was $9.7 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 15.0 percent of revenue, a 60 basis-point increase from the first 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 first quarter was $33.7 million , a $5.8 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 $0.9 million for the first quarter of fiscal 2021, compared to ($5.6) million in the prior-year quarter.
“Our results demonstrate the effectiveness of the strategic actions we’ve taken over the past two years. We are now positioned to achieve even greater success going forward, accelerating our growth and profitability,” commented Ms. Perneau. “Although we experienced widespread shutdowns due to last month’s winter storms, and the prior-year quarter includes seven weeks that were unaffected by COVID-related shutdowns, we expect to report sequential and year-over-year improvement in our operating results for the second quarter.”
2021 Earnings Conference Call and Webcast
Volt Information Sciences, Inc. will conduct a conference call on Tuesday, March 16, 2021, at 5:00 p.m. Eastern Time, to review the financial results for the first quarter ended January 31, 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 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
jnoyons@threepa.com
Financial Tables Follow
Results of Operations
(in thousands, except per share data)
Three Months Ended
January 31, 2021
November 1, 2020
February 2, 2020
Net revenue
$
217,958
$
211,073
$
217,766
Cost of services
185,276
176,844
186,339
Gross margin
32,682
34,229
31,427
Selling, administrative and other operating costs
33,747
30,735
39,497
Restructuring and severance costs
632
438
1,246
Impairment charges
31
14,518
11
Operating loss
(1,728
)
(11,462
)
(9,327
)
Interest income (expense), net
(477
)
(431
)
(700
)
Foreign exchange gain (loss), net
242
(62
)
(328
)
Other income (expense), net
(156
)
(291
)
(258
)
Loss before income taxes
(2,119
)
(12,246
)
(10,613
)
Income tax provision
327
271
195
Net loss
$
(2,446
)
$
(12,517
)
$
(10,808
)
Per share data:
Basic:
Net loss
$
(0.11
)
$
(0.58
)
$
(0.50
)
Weighted average number of shares
21,793
21,607
21,416
Diluted:
Net loss
$
(0.11
)
$
(0.58
)
$
(0.50
)
Weighted average number of shares
21,793
21,607
21,416
Segment data:
Net revenue:
North American Staffing
$
184,216
$
178,603
$
182,395
International Staffing
24,013
23,033
Volt Information Sciences, Inc.
VOLT Rankings
N/A Ranked by Stock Gains
VOLT Stock Data
Industry
Human Resources Consulting Services
Sector
Professional, Scientific, and Technical Services
Tags
Commercial Services, Personnel Services, Professional, Scientific, and Technical Services, Human Resources Consulting Services
Country
US
City
Orange
About VOLT
Volt Information Sciences, Inc. is a global provider of staffing services (traditional time and materials-based as well as project-based). Its 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. Its 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.
