UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 12, 2018

VOLT INFORMATION SCIENCES, INC.
(Exact name of registrant as specified in its charter)

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

£	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

£	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

£	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

£	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. £

 

---

 

Item 2.02

Results of Operations and Financial Condition

On January 12, 2018, Volt Information Sciences, Inc. issued a press release announcing earnings for its fiscal year ended October 29, 2017.  A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein in its entirety.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  January 12, 2018

 

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX

Exhibit No.

Description of Exhibit

99.1	Press Release of Volt Information Sciences, Inc. dated January 12, 2018 announcing earnings for its fiscal year ended October 29, 2017.

 

 

 

 

 

 

 

 

 

 

---

Exhibit 99.1

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year

Financial Results

NEW YORK, NY, January 12, 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 fiscal 2017 fourth quarter and full year ended October 29, 2017. Key highlights include:

·

Fourth quarter net revenue of $288.5 million, down 15.5% year-over-year; on a same-store basis, net revenue declined 11.3% year-over-year excluding net revenue contributed from businesses sold or exited during the past year and the effect of foreign exchange rate fluctuations; Full-year net revenue of $1,194.4 million, down 10.5% year-over-year and down 6.6% year-over-year on a same-store basis

·

Fourth quarter gross margin percentage of 16.5%, down 14 basis points year-over-year; Full year gross margin percentage of 15.7% increased 52 basis points year-over-year

·

Completed the sale of the quality assurance business of the Technology Outsourcing Services and Solutions segment, a non-core business, which resulted in net cash proceeds of $66.8 million

·

Received $5 million in net cash as part of early payment of note and a settlement agreement with NewNet Communications Technologies, LLC

·

Reduced debt balance by $50.0 million from the prior quarter, ending the year with a total debt balance of $50.0 million

Commenting on Volt’s performance, Michael Dean, President and CEO, said, “Volt’s full year results showed continued evidence of improvement in several key financial and operational metrics. I am pleased our focus on higher margin business resulted in expanding our gross margins by 52 basis points year-over-year to 15.7%. In addition, our ongoing focus on achieving operational efficiencies and cost containment has continued to deliver lower selling, administrative and other operating costs.”

Mr. Dean continued, “The turnaround strategy that we have executed over the past two years has successfully helped us address many of Volt’s operational challenges and we have a strong foundation from which we continue to build. During this time, we have dramatically simplified our operating structure through the sale of non-core assets, which has strengthened our balance sheet and liquidity position. At the same time, we have also been successful in streamlining our cost structure and gross margins continue to improve. While much has been accomplished, we now must ensure our efforts and investments convert to topline growth, as well as continue to explore a broad range of opportunities to enhance shareholder value. I look forward to overcoming Volt’s remaining challenges and emerging as a stronger company.”

Fiscal 2017 Fourth Quarter Results

Total revenue for the fiscal 2017 fourth quarter was $288.5 million, down $53.1 million, or 15.5%, compared to $341.6 million in the fourth quarter of fiscal 2016. On a same-store basis, net revenue declined 11.3% 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 provides a broad spectrum of contingent staffing, direct placement, recruitment process outsourcing and other employment services, was $224.2 million, a $31.0 million, or 12.1% decrease compared to North American Staffing revenue of $255.2 million in the fourth quarter of fiscal 2016. The decline was primarily driven by lower demand from customers in both professional and commercial job families, as well as customers experiencing decreased demand for their services and changes in their staffing models.

International Staffing revenue, which includes the Company’s contingent staffing, direct placement and managed service programs businesses in Europe and Asia, was $30.2 million, a $1.5 million, or 4.9% decrease compared to $31.7 million from the fourth quarter of fiscal 2016, primarily as a result of softening economic demand in the United Kingdom.

Technology Outsourcing Services and Solutions revenue, which provides quality assurance, business intelligence and analytics and customer service support for companies in a variety of industries, was $26.4 million, down $4.1 million, or 13.7%, compared to $30.5 million in the prior year period, primarily due to lower volume in quality assurance testing services, which was sold at the end of the quarter. While the overall segment was down year-over-year, the remaining call center business experienced sequential revenue growth in the fourth quarter as well as year-over-year revenue growth in fiscal 2017.

Corporate and Other revenue, which now primarily consists of the Company’s North American managed service business was $9.7 million, down $17.9 million, or 65.0%, compared to $27.6 million in the fourth quarter of fiscal 2016. The year-over-year revenue decline was primarily driven by the impact from the sale of Maintech, which occurred early in the second quarter of 2017. On a same-store basis, excluding businesses sold or exited of $17.6 million, Corporate and Other revenue decreased $0.3 million, or 3.6%, year-over-year.

Selling, administrative and other operating costs in the fourth quarter of fiscal 2017 decreased $0.5 million, or 1.0%, to $50.1 million from $50.6 million in the fourth quarter of fiscal 2016. This decrease was primarily due to ongoing cost reductions throughout the business as well as the sale of Maintech. These decreases were partially offset by higher depreciation and software license expenses related to completion of the first phase of the upgrade of the Company’s back-office financial suite and information technology tools.

Income from continuing operations of $39.8 million in the fourth quarter of fiscal 2017 increased $37.0 million from $2.8 million in the fourth quarter of fiscal 2016. The increase was primarily due to the aforementioned gain on the sale of the Company’s quality assurance testing division of the Technology Outsourcing Services and Solutions segment for $48.0 million.

Adjusted EBITDA, which is a Non-GAAP measure, was $0.1 million in the fiscal 2017 fourth quarter, down $7.9 million from $8.0 million (Non-GAAP) 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.

 

 

Fiscal 2017 Full Year Results

Total revenue for the full year of fiscal 2017 was $1,194.4 million, down $140.3 million, or 10.5%, compared to total revenue of $1,334.7 million for the full year of fiscal 2016. 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 was $919.3 million, down $75.0 million or 7.6%, compared to $994.3 million for the full year of fiscal 2016. International Staffing revenue was $119.8 million, down $11.7 million or 8.9%, from $131.5 million in the prior year period.

Technology Outsourcing Services and Solutions revenue was $100.8 million, down $5.8 million or 5.4%, from $106.6 million for the full year of fiscal 2016. Corporate and Other revenue was $61.0 million, down $53.8 million or 46.8%, from $114.8 million in the prior year period. The year-over-year revenue decline was primarily driven by the sale of Maintech. On a same-store basis, excluding businesses sold or exited, Corporate and Other revenue decreased $5.3 million, or 12.4%, year-over-year.

Selling, administrative and other operating costs of $197.1 million for the full year of fiscal 2017 decreased $6.8 million, or 3.3%, from $203.9 million for the full year of fiscal 2016. The decrease was primarily due to ongoing cost reductions in all areas of the business, the sale of Maintech and the release of a reserve related to the dissolution of the Employee Welfare Medical Trust.  These decreases were partially offset by higher depreciation and software license expenses related to completion of the first phase of the upgrade of the Company’s back-office financial suite and information technology tools.

Income from continuing operations of $28.8 million for the full year of fiscal 2017 increased by $43.4 million from a loss of $14.6 million for the full year of fiscal 2016. Net income included $3.1 million of restructuring and severance costs and settlement charges, offset by a $52.0 million gain on the sale of Maintech, a non-core business and the sale of the quality assurance business of the Technology Outsourcing Services and Solutions segment.

Adjusted EBITDA, which is a Non-GAAP measure, was a negative $0.9 million for the full year of fiscal 2017, down $6.9 million, from a positive $6.0 million (Non-GAAP) 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.

Liquidity

As of January 5, 2018, the Company had $87.4 million of global liquidity as compared to $94.8 million at October 29, 2017.

Corporate Developments

During the fourth quarter, the Company completed the sale of its quality assurance business, a part of its Technology Outsourcing Services and Solutions segment, which resulted in net cash proceeds of $66.8 million. The Company recognized a gain of $48.0 million in connection with the sale and utilized tax loss carryforwards to eliminate all federal income tax.

 

 

 

On October 27, 2017, the Company entered into a settlement agreement with NewNet Communication Technologies, LLC (“NewNet”) and the Company’s affiliate Volt Delta Resource Holdings, Inc. (“Volt Delta”). The settlement related to the Company’s December 2014 sale of its Computer Systems segment, Volt Delta, to NewNet. The net result is the Company received cash from NewNet of $5.0 million on October 27, 2017, as well as a $1.0 million promissory note maturing no later than January 31, 2018.

Conference Call and Webcast

A conference call and simultaneous webcast to discuss the fiscal 2017 fourth quarter and full year financial results will be held today at 1:00 p.m. Eastern Time / 10:00 a.m. Pacific Time. Volt’s President and CEO Michael Dean and CFO 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 go to 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 Friday, January 12, 2018 at 4:00 p.m. Eastern Time through Friday, January 26, 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 # 13674642. 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.

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) and managed staffing service programs. Our staffing services consists of workforce solutions that include providing contingent workers, personnel recruitment services, and managed services programs supporting primarily professional administration, technical, information technology, light-industrial and engineering positions. Our managed staffing service programs involves managing the procurement and on-boarding of contingent workers from multiple providers. Our technology outsourcing services consisted primarily of customer care services and quality assurance services; however only the call center services will remain following the sale of the quality assurance business on October 27, 2017. Our complementary businesses offer 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.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to a number of known and unknown risks, including, among others, general economic, competitive and other business conditions, the degree and timing of customer utilization and rate of renewals of 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 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 http://www.sec.gov and at the Company’s website at http://www.volt.com in the Investor & Governance section.

Investor Contacts:

Volt Information Sciences, Inc.

Lasse Glassen

Addo Investor Relations

424-238-6249

--Financial Tables to Follow--

 

 

 

 

 

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 6 of 11

Effective in the first quarter of fiscal 2017, in an effort to simplify and refine our internal reporting, the Company modified its intersegment sales structure between North American Staffing and Technology Outsourcing Services and Solutions segments. Accordingly, all prior periods have been recast to reflect the current segment presentation.

---

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 7 of 11

---

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 8 of 11

                  

---

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 9 of 11

              

 

Special item adjustments consist of the following:

(a)

Relates to the amortization of the gain on the sale of the Orange, CA facility, which is included in Selling, administrative and other operating costs.

(b)

Relates primarily to Company-wide cost reduction plan implemented in the first quarter of fiscal 2016.

(c)

Relates to the settlement charge associated with the early payment of the NewNet note.

(d)

Relates to the gain on the sale of the quality assurance division of the Technology Outsourcing Services and Solutions segment.

(e)

Relates to impairment of capitalized software.

---

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 10 of 11

 

Special item adjustments consist of the following:

(a)

Relates to the amortization of the gain on the sale of the Orange, CA facility, which is included in Selling, administrative and other operating costs.

(b)

Relates primarily to Company-wide cost reduction plan implemented in the first quarter of fiscal 2016.

(c)

Relates to the settlement charge associated with the early payment of the NewNet note and impairment of previously purchased software module no longer in use.

(d)

Relates to the sale of Maintech, a non-core business and the sale of the quality assurance division of the Technology Outsourcing Services and Solutions segment.

(e)

Relates to a discrete tax benefit resulting from the resolution of uncertain tax positions upon the completion and effective settlement of the IRS audit of the Company’s fiscal 2004 through 2010 federal tax and associated state tax audits.

(f)

Relates primarily to the amortization of the gain on the sale of the Orange, CA facility partially offset by consultants and professional fees incurred to attract world class executive talent and implementing a pay for performance annual incentive plan.

(g)

Relates to previously purchased software module that is no longer in use.

(h)

Relates to the gain on the sale of the San Diego, CA facility.

---

Volt Information Sciences Reports Fiscal 2017 Fourth Quarter and Full Year Results

January 12, 2018

Page 11 of 11