New York | 13-5658129 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
2401 N. Glassell Street, Orange, California | 92865 | ||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $0.10 | VOLT | NYSE American |
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company x | Emerging growth company ¨ | ||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 2, 2020 | July 28, 2019 | August 2, 2020 | July 28, 2019 | ||||||||||||||||||||
NET REVENUE | $ | $ | $ | $ | |||||||||||||||||||
Cost of services | |||||||||||||||||||||||
GROSS MARGIN | |||||||||||||||||||||||
EXPENSES | |||||||||||||||||||||||
Selling, administrative and other operating costs | |||||||||||||||||||||||
Restructuring and severance costs | |||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||
OPERATING LOSS | ( | ( | ( | ( | |||||||||||||||||||
OTHER INCOME (EXPENSE), NET | |||||||||||||||||||||||
Interest income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
Foreign exchange gain (loss), net | ( | ( | ( | ||||||||||||||||||||
Other income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
TOTAL OTHER INCOME (EXPENSE), NET | ( | ( | ( | ( | |||||||||||||||||||
LOSS BEFORE INCOME TAXES | ( | ( | ( | ( | |||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
NET LOSS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
PER SHARE DATA: | |||||||||||||||||||||||
Basic and Diluted: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average number of shares |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
August 2, 2020 | July 28, 2019 | August 2, 2020 | July 28, 2019 | ||||||||||||||||||||
NET LOSS | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustments net of taxes of $ | ( | ( | |||||||||||||||||||||
COMPREHENSIVE LOSS | $ | ( | $ | ( | $ | ( | $ | ( |
August 2, 2020 | November 3, 2019 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and short-term investments | |||||||||||
Trade accounts receivable, net of allowances of $ | |||||||||||
Other current assets | |||||||||||
TOTAL CURRENT ASSETS | |||||||||||
Property, equipment and software, net | |||||||||||
Right of use assets - operating leases | — | ||||||||||
Other assets, excluding current portion | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accrued compensation | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued taxes other than income taxes | |||||||||||
Accrued insurance and other | |||||||||||
Operating lease liabilities | — | ||||||||||
Income taxes payable | |||||||||||
TOTAL CURRENT LIABILITIES | |||||||||||
Accrued payroll taxes and other, excluding current portion | |||||||||||
Operating lease liabilities, excluding current portion | — | ||||||||||
Deferred gain on sale of real estate, excluding current portion | |||||||||||
Income taxes payable, excluding current portion | |||||||||||
Deferred income taxes | |||||||||||
Long-term debt, net | |||||||||||
TOTAL LIABILITIES | |||||||||||
Commitments and contingencies | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
Paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost; | ( | ( | |||||||||
TOTAL STOCKHOLDERS’ EQUITY | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Nine Months Ended August 2, 2020 | |||||||||||||||||||||||||||||||||||||||||
Common Stock $ | Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
BALANCE AT NOVEMBER 3, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Effect of new accounting principle | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
BALANCE AT FEBRUARY 2, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
BALANCE AT MAY 3, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | — | |||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
BALANCE AT AUGUST 2, 2020 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Nine Months Ended July 28, 2019 | |||||||||||||||||||||||||||||||||||||||||
Common Stock $ | Paid-in Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
BALANCE AT OCTOBER 28, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Effect of new accounting principle | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | ( | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
BALANCE AT JANUARY 27, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
BALANCE AT APRIL 28, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
BALANCE AT JULY 28, 2019 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||
August 2, 2020 | July 28, 2019 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustment to reconcile net loss to cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Operating lease asset amortization | — | ||||||||||
Allowance (release) of doubtful accounts and sales allowances | ( | ||||||||||
Unrealized foreign currency exchange (gain) loss | ( | ||||||||||
Impairment charges | |||||||||||
Amortization of gain on sale leaseback of property | ( | ||||||||||
Loss (gain) on dispositions of property, equipment and software | ( | ||||||||||
Share-based compensation | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Trade accounts receivable | |||||||||||
Other assets | |||||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||
Income taxes | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS USED IN INVESTING ACTIVITIES: | |||||||||||
Sales of investments | |||||||||||
Purchases of investments | ( | ( | |||||||||
Proceeds from sale of property, equipment, and software | |||||||||||
Purchases of property, equipment, and software | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Repayment of borrowings | ( | ( | |||||||||
Draw-down on borrowings | |||||||||||
Debt issuance costs | ( | ( | |||||||||
Withholding tax payment on vesting of stock awards | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
Net increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
Cash paid during the period: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted cash: | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in Restricted cash and short-term investments | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||
August 2, 2020 | |||||||||||
Operating lease expense | $ | $ | |||||||||
Sublease income | ( | ( | |||||||||
Variable lease expense | $ | $ | |||||||||
Total (1) | $ | $ |
Nine Months Ended August 2, 2020 | |||||
Weighted average remaining lease term (years) | |||||
Weighted average discount rate | % |
Fiscal Year: | Amount | ||||
Remainder of 2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total future lease payments | $ | ||||
Less: Imputed interest | |||||
Total operating lease liabilities | $ |
Fiscal Year: | Amount | ||||
2020 | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total future lease payments | $ |
Three Months Ended August 2, 2020 | ||||||||||||||||||||
Segment | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | ||||||||||||||
Service Revenues: | ||||||||||||||||||||
Staffing Services | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
Direct Placement Services | ||||||||||||||||||||
Managed Service Programs | ||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | ||||||||||||||
Geographical Markets: | ||||||||||||||||||||
Domestic | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
International | ( | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( |
Three Months Ended July 28, 2019 | ||||||||||||||||||||
Segment | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations | ||||||||||||||
Service Revenues: | ||||||||||||||||||||
Staffing Services | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
Direct Placement Services | ( | |||||||||||||||||||
Managed Service Programs | ||||||||||||||||||||
Call Center Services | ||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | ||||||||||||||
Geographical Markets: | ||||||||||||||||||||
Domestic | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
International | ( | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( |
Nine Months Ended August 2, 2020 | ||||||||||||||||||||
Segment | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | ||||||||||||||
Service Revenues: | ||||||||||||||||||||
Staffing Services | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
Direct Placement Services | ||||||||||||||||||||
Managed Service Programs | ||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | ||||||||||||||
Geographical Markets: | ||||||||||||||||||||
Domestic | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
International | ( | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( |
Nine Months Ended July 28, 2019 | ||||||||||||||||||||
Segment | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations | ||||||||||||||
Service Revenues: | ||||||||||||||||||||
Staffing Services | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
Direct Placement Services | ( | |||||||||||||||||||
Managed Service Programs | ||||||||||||||||||||
Call Center Services | ||||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( | ||||||||||||||
Geographical Markets: | ||||||||||||||||||||
Domestic | $ | $ | $ | $ | $ | $ | ( | |||||||||||||
International | ( | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | ( |
Three Months Ended | Nine Months Ended | |||||||||||||
August 2, 2020 | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
Accumulated other comprehensive loss at beginning of the period | $ | ( | $ | ( | ||||||||||
Other comprehensive income | ||||||||||||||
Accumulated other comprehensive loss at August 2, 2020 | $ | ( | $ | ( |
August 2, 2020 | November 3, 2019 | ||||||||||
Financing programs | $ | $ | |||||||||
Less: | |||||||||||
Deferred financing fees | |||||||||||
Total long-term debt, net | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
August 2, 2020 | July 28, 2019 | August 2, 2020 | July 28, 2019 | |||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Denominator | ||||||||||||||||||||||||||
Basic weighted average number of shares | ||||||||||||||||||||||||||
Diluted weighted average number of shares | ||||||||||||||||||||||||||
Net loss per share: | ||||||||||||||||||||||||||
Basic | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Diluted | $ | ( | $ | ( | $ | ( | $ | ( |
Performance Share Units | Number of | Weighted Average | ||||||||||||
Shares | Grant Date Fair Value | |||||||||||||
Outstanding at November 3, 2019 | $ | |||||||||||||
Forfeited | ( | $ | ||||||||||||
Vested | ( | $ | ||||||||||||
Outstanding at August 2, 2020 | $ |
Restricted Stock Units | Number of | Weighted Average | ||||||||||||
Shares | Grant Date Fair Value | |||||||||||||
Outstanding at November 3, 2019 | $ | |||||||||||||
Granted | $ | |||||||||||||
Forfeited | ( | $ | ||||||||||||
Vested | ( | $ | ||||||||||||
Outstanding at August 2, 2020 | $ |
Stock Options | Number of Shares | Weighted Average Exercise Price | Weighted Average Contractual Life (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||||
Outstanding at November 3, 2019 | $ | $ | ||||||||||||||||||||||||
Forfeited | ( | $ | — | $— | ||||||||||||||||||||||
Expired | ( | $ | — | $— | ||||||||||||||||||||||
Outstanding at August 2, 2020 | $ | $ | ||||||||||||||||||||||||
Unvested at August 2, 2020 | $ | $ | ||||||||||||||||||||||||
Exercisable at August 2, 2020 | $ | $ |
August 2, 2020 | ||||||||
Balance, beginning of year | $ | |||||||
Cease use liabilities transferred to ROU assets | ( | |||||||
Liability at November 4, 2019 | ||||||||
Charged to expense | ||||||||
Cash payments | ( | |||||||
Ending Balance | $ |
Three Months Ended August 2, 2020 | |||||||||||||||||||||||||||||||||||
Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Cost of services | ( | ||||||||||||||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||||||||||||||
Selling, administrative and other operating costs | |||||||||||||||||||||||||||||||||||
Restructuring and severance costs | |||||||||||||||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||||||||||||||
Net loss | $ | ( |
Three Months Ended July 28, 2019 | |||||||||||||||||||||||||||||||||||
Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations (2) | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Cost of services | ( | ||||||||||||||||||||||||||||||||||
Gross margin | ( | ||||||||||||||||||||||||||||||||||
Selling, administrative and other operating costs | |||||||||||||||||||||||||||||||||||
Restructuring and severance costs | |||||||||||||||||||||||||||||||||||
Impairment charge | |||||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||||||||||||||
Net loss | $ | ( |
Nine Months Ended August 2, 2020 | |||||||||||||||||||||||||||||||||||
Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Cost of services | ( | ||||||||||||||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||||||||||||||
Selling, administrative and other operating costs | |||||||||||||||||||||||||||||||||||
Restructuring and severance costs | |||||||||||||||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||||||||||||||
Net loss | $ | ( |
Nine Months Ended July 28, 2019 | |||||||||||||||||||||||||||||||||||
Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations (2) | ||||||||||||||||||||||||||||||
Net revenue | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Cost of services | ( | ||||||||||||||||||||||||||||||||||
Gross margin | |||||||||||||||||||||||||||||||||||
Selling, administrative and other operating costs | |||||||||||||||||||||||||||||||||||
Restructuring and severance costs | |||||||||||||||||||||||||||||||||||
Impairment charges | |||||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ( | |||||||||||||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||||||||||||||
Net loss | $ | ( |
Three Months Ended August 2, 2020 | |||||||||||||||||||||||||||||||||||
(in thousands) | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | |||||||||||||||||||||||||||||
Net revenue | $ | 185,941 | $ | 154,711 | $ | 21,749 | $ | 9,436 | $ | 149 | $ | (104) | |||||||||||||||||||||||
Cost of services | 155,983 | 130,829 | 17,805 | 7,375 | 78 | (104) | |||||||||||||||||||||||||||||
Gross margin | 29,958 | 23,882 | 3,944 | 2,061 | 71 | — | |||||||||||||||||||||||||||||
Selling, administrative and other operating costs | 31,245 | 19,053 | 3,312 | 1,117 | 7,763 | — | |||||||||||||||||||||||||||||
Restructuring and severance costs | 546 | 335 | 81 | — | 130 | — | |||||||||||||||||||||||||||||
Impairment charges | 2,384 | 1,803 | — | — | 581 | — | |||||||||||||||||||||||||||||
Operating income (loss) | (4,217) | 2,691 | 551 | 944 | (8,403) | — | |||||||||||||||||||||||||||||
Other income (expense), net | (64) | ||||||||||||||||||||||||||||||||||
Income tax provision | 556 | ||||||||||||||||||||||||||||||||||
Net loss | $ | (4,837) |
Three Months Ended July 28, 2019 | |||||||||||||||||||||||||||||||||||
(in thousands) | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations (2) | |||||||||||||||||||||||||||||
Net revenue | $ | 233,176 | $ | 193,641 | $ | 28,728 | $ | 9,555 | $ | 1,856 | $ | (604) | |||||||||||||||||||||||
Cost of services | 197,528 | 164,809 | 24,181 | 7,053 | 2,089 | (604) | |||||||||||||||||||||||||||||
Gross margin | 35,648 | 28,832 | 4,547 | 2,502 | (233) | — | |||||||||||||||||||||||||||||
Selling, administrative and other operating costs | 38,395 | 24,346 | 4,023 | 1,382 | 8,644 | — | |||||||||||||||||||||||||||||
Restructuring and severance costs | 2,017 | 121 | 182 | — | 1,714 | — | |||||||||||||||||||||||||||||
Impairment charge | 79 | — | — | — | 79 | — | |||||||||||||||||||||||||||||
Operating income (loss) | (4,843) | 4,365 | 342 | 1,120 | (10,670) | — | |||||||||||||||||||||||||||||
Other income (expense), net | (1,049) | ||||||||||||||||||||||||||||||||||
Income tax provision | 165 | ||||||||||||||||||||||||||||||||||
Net loss | $ | (6,057) |
Nine Months Ended August 2, 2020 | |||||||||||||||||||||||||||||||||||
(in thousands) | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other | Eliminations | |||||||||||||||||||||||||||||
Net revenue | $ | 610,982 | $ | 510,492 | $ | 72,275 | $ | 28,550 | $ | 539 | $ | (874) | |||||||||||||||||||||||
Cost of services | 517,360 | 435,646 | 60,117 | 22,212 | 259 | (874) | |||||||||||||||||||||||||||||
Gross margin | 93,622 | 74,846 | 12,158 | 6,338 | 280 | — | |||||||||||||||||||||||||||||
Selling, administrative and other operating costs | 106,931 | 66,905 | 10,845 | 4,149 | 25,032 | — | |||||||||||||||||||||||||||||
Restructuring and severance costs | 2,203 | 761 | 192 | — | 1,250 | — | |||||||||||||||||||||||||||||
Impairment charges | 2,395 | 1,814 | — | — | 581 | — | |||||||||||||||||||||||||||||
Operating income (loss) | (17,907) | 5,366 | 1,121 | 2,189 | (26,583) | — | |||||||||||||||||||||||||||||
Other income (expense), net | (2,389) | ||||||||||||||||||||||||||||||||||
Income tax provision | 774 | ||||||||||||||||||||||||||||||||||
Net loss | $ | (21,070) |
Nine Months Ended July 28, 2019 | |||||||||||||||||||||||||||||||||||
(in thousands) | Total | North American Staffing | International Staffing | North American MSP | Corporate and Other (1) | Eliminations (2) | |||||||||||||||||||||||||||||
Net revenue | $ | 738,682 | $ | 614,360 | $ | 83,803 | $ | 27,351 | $ | 15,133 | $ | (1,965) | |||||||||||||||||||||||
Cost of services | 629,078 | 526,172 | 70,414 | 20,157 | 14,300 | (1,965) | |||||||||||||||||||||||||||||
Gross margin | 109,604 | 88,188 | 13,389 | 7,194 | 833 | — | |||||||||||||||||||||||||||||
Selling, administrative and other operating costs | 117,144 | 77,063 | 11,659 | 3,941 | 24,481 | — | |||||||||||||||||||||||||||||
Restructuring and severance costs | 2,800 | 329 | 456 | 68 | 1,947 | — | |||||||||||||||||||||||||||||
Impairment charges | 426 | — | — | — | 426 | — | |||||||||||||||||||||||||||||
Operating income (loss) | (10,766) | 10,796 | 1,274 | 3,185 | (26,021) | — | |||||||||||||||||||||||||||||
Other income (expense), net | (3,000) | ||||||||||||||||||||||||||||||||||
Income tax provision | 671 | ||||||||||||||||||||||||||||||||||
Net loss | $ | (14,437) |
Global Liquidity | |||||||||||||||||
July 28, 2019 | November 3, 2019 | February 2, 2020 | May 3, 2020 | August 2, 2020 | |||||||||||||
Cash and cash equivalents (a) | $ | 36,031 | $ | 28,672 | $ | 30,876 | $ | 26,223 | $ | 30,928 | |||||||
Total outstanding debt | $ | 55,000 | $ | 55,000 | $ | 55,000 | $ | 60,000 | $ | 60,000 | |||||||
Cash in banks (b)(c) | $ | 24,224 | $ | 19,945 | $ | 21,287 | $ | 22,876 | $ | 26,126 | |||||||
DZ Financing Program | 16,416 | 22,271 | 11,302 | 4,202 | 5,122 | ||||||||||||
Global liquidity | 40,640 | 42,216 | 32,589 | 27,078 | 31,248 | ||||||||||||
Minimum liquidity threshold | 15,000 | 15,000 | 15,000 | 15,000 | 15,000 | ||||||||||||
Available liquidity | $ | 25,640 | $ | 27,216 | $ | 17,589 | $ | 12,078 | $ | 16,248 |
Nine Months Ended | |||||||||||
August 2, 2020 | July 28, 2019 | ||||||||||
Net cash provided by operating activities | $ | 13,082 | $ | 10,161 | |||||||
Net cash used in investing activities | (3,336) | (6,227) | |||||||||
Net cash provided by financing activities | 4,595 | 4,063 | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (463) | (633) | |||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 13,878 | $ | 7,364 |
Exhibits | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
VOLT INFORMATION SCIENCES, INC. | ||||||||||||||
Date: September 10, 2020 | By: | /s/ Linda Perneau | ||||||||||||
Linda Perneau | ||||||||||||||
President and Chief Executive Officer (Principal Executive Officer) | ||||||||||||||
Date: September 10, 2020 | By: | /s/ Herbert M. Mueller | ||||||||||||
Herbert M. Mueller | ||||||||||||||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) | ||||||||||||||
Date: September 10, 2020 | By: | /s/ Leonard Naujokas | ||||||||||||
Leonard Naujokas | ||||||||||||||
Controller and Chief Accounting Officer (Principal Accounting Officer) |
Date: September 10, 2020 | By: | /s/ Linda Perneau | |||||||||
Linda Perneau President and Chief Executive Officer |
Date: September 10, 2020 | By: | /s/ Herbert M. Mueller | |||||||||
Herbert M. Mueller | |||||||||||
Senior Vice President and Chief Financial Officer |
Date: September 10, 2020 | By: | /s/ Linda Perneau | |||||||||
Linda Perneau | |||||||||||
President and Chief Executive Officer |
Date: September 10, 2020 | By: | /s/ Herbert M. Mueller | |||||||||
Herbert M. Mueller | |||||||||||
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Aug. 02, 2020 |
Sep. 04, 2020 |
|
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 02, 2020 | |
Document Transition Report | false | |
Entity Registrant Name | VOLT INFORMATION SCIENCES, INC. | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000103872 | |
Current Fiscal Year End Date | --11-01 | |
Entity Smaller Reporting Company | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 21,702,078 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Income Statement [Abstract] | ||||
NET REVENUE | $ 185,941 | $ 233,176 | $ 610,982 | $ 738,682 |
Cost of services | 155,983 | 197,528 | 517,360 | 629,078 |
GROSS MARGIN | 29,958 | 35,648 | 93,622 | 109,604 |
EXPENSES | ||||
Selling, administrative and other operating costs | 31,245 | 38,395 | 106,931 | 117,144 |
Restructuring and severance costs | 546 | 2,017 | 2,203 | 2,800 |
Impairment charges | 2,384 | 79 | 2,395 | 426 |
Operating income (loss) | (4,217) | (4,843) | (17,907) | (10,766) |
OTHER INCOME (EXPENSE), NET | ||||
Interest income (expense), net | (467) | (714) | (1,788) | (2,159) |
Foreign exchange gain (loss), net | 571 | (151) | (23) | (252) |
Other income (expense), net | (168) | (184) | (578) | (589) |
TOTAL OTHER INCOME (EXPENSE), NET | (64) | (1,049) | (2,389) | (3,000) |
LOSS BEFORE INCOME TAXES | (4,281) | (5,892) | (20,296) | (13,766) |
Income tax provision | 556 | 165 | 774 | 671 |
NET LOSS | $ (4,837) | $ (6,057) | $ (21,070) | $ (14,437) |
Basic and Diluted: | ||||
Net loss (usd per share) | $ (0.22) | $ (0.29) | $ (0.98) | $ (0.68) |
Weighted average number of shares (shares) | 21,589 | 21,157 | 21,474 | 21,106 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
NET LOSS | $ (4,837) | $ (6,057) | $ (21,070) | $ (14,437) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments net of taxes of $0 and $0, respectively | 733 | (565) | 495 | (586) |
COMPREHENSIVE LOSS | $ (4,104) | $ (6,622) | $ (20,575) | $ (15,023) |
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Aug. 02, 2020 |
Nov. 03, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 235 | $ 117 |
Preferred stock, par value (usd per share) | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized (shares) | 500,000 | 500,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (shares) | 23,738,003 | 23,738,003 |
Common stock, shares outstanding (shares) | 21,702,078 | 21,367,821 |
Treasury stock, shares (shares) | 2,035,925 | 2,370,182 |
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
Aug. 02, 2020 |
May 03, 2020 |
Feb. 02, 2020 |
Nov. 03, 2019 |
Jul. 28, 2019 |
Apr. 28, 2019 |
Jan. 27, 2019 |
---|---|---|---|---|---|---|---|
Statement of Stockholders' Equity [Abstract] | |||||||
Common stock, par value (usd per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 |
Basis of Presentation |
9 Months Ended |
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Aug. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Presentation The accompanying interim condensed consolidated financial statements of Volt Information Sciences, Inc. (“Volt” or the “Company”) have been prepared in conformity with generally accepted accounting principles ("GAAP"), consistent in all material respects with those applied in the Annual Report on Form 10-K for the year ended November 3, 2019. The Company makes estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates and changes in estimates are reflected in the period in which they become known. Accounting for certain expenses, including income taxes, is based on full year assumptions, and the financial statements reflect all normal adjustments that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The interim information is unaudited and is prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), which provides for omission of certain information and footnote disclosures. This interim financial information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended November 3, 2019.
|
Recently Issued Accounting Pronouncements |
9 Months Ended |
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Aug. 02, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements New Accounting Standards Not Yet Adopted by the Company In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company intends to apply ASU 2020-04 in the first quarter of fiscal 2021 and does not anticipate a significant impact on its consolidated financial statements upon adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of Accounting Standards Codification (“ASC”) 820. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU 2018-13. ASU 2018-13 is effective for the Company in the first quarter of fiscal 2021. The Company does not anticipate a significant impact on the consolidated financial statements upon adoption. In June 2016, the FASB issued ASU 2016-13 (ASC Topic 326), as clarified in ASU 2019-04, ASU 2019-05, ASU 2019-11, and ASU 2018-19, amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. The amendments are effective for fiscal years beginning after December 15, 2022, which for the Company will be the first quarter of fiscal 2024. Although the impact upon adoption will depend on the financial instruments held by the Company at that time, the Company does not anticipate a significant impact on its consolidated financial statements based on the instruments currently held and its historical trend of bad debt expense relating to trade accounts receivable. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures. Recently Adopted by the Company In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the guidance in Topic 718 to include share-based payments for goods and services to non-employees and generally aligns it with the guidance for share-based payments to employees. ASU 2018-07 was effective for the Company in the first quarter of fiscal 2020 and the adoption of this guidance had no impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This ASU requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This ASU was effective in the first quarter of fiscal 2020 resulting in the Company recording right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheet. The adoption of this standard did not have a material impact on the consolidated financial statements of operations and consolidated statements of cash flows. For the impact on the Company's consolidated financial statements, refer to Note 3 - Leases.All other ASUs that became effective for Volt in the first nine months of fiscal 2020 were not applicable to the Company at this time and therefore, did not have any impact during the period.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company adopted ASC 842, Leases on November 4, 2019 using the modified transition method without retrospective application to comparative periods. The Company elected the package of three practical expedients allowed for under the transition guidance. Accordingly, the Company did not reassess: (1) whether any expired or existing contracts are/or contain leases; (2) the lease classification for any expired or existing leases; or (3) initial direct costs for any existing leases. The Company has also elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less. The Company’s material operating leases consist of branch locations, as well as corporate office space. Our leases have remaining terms of 1 - 11 years. The lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal option periods. Volt determines if an arrangement meets the criteria of a lease at inception, at which time it also performs an analysis to determine whether the lease qualifies as operating or financing. The Company does not currently have any finance leases. Upon adoption, the Company recorded approximately $47.2 million of ROU assets and $52.0 million of lease liabilities related to operating leases in the Condensed Consolidated Balance Sheet. At transition, the ROU asset was measured at the initial amount of the lease liability adjusted for any deferred rent and cease-use liabilities. The Company also recognized a $22.2 million cumulative-effect adjustment to retained earnings related to the deferred gain on the sale and leaseback of real estate. This gain was previously being amortized at approximately $0.5 million per quarter as an offset to rent expense in the Condensed Consolidated Statements of Operations. Since the Company has a full valuation allowance against its deferred tax assets, the impact is a reduction to our deferred tax assets and related valuation allowance, which resulted in no tax impact to the net change to equity. Operating lease liabilities represent the present value of lease payments not yet paid. ROU assets represent Volt's right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. As the rate implicit in the lease is not readily determinable, the Company used its incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each as a single lease component, for all underlying asset classes. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance, tax payments and other miscellaneous costs. The variable portion of lease payments is not included in the ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. Operating leases are included in Right of use assets - operating leases and Operating lease liabilities, current and long-term, in the Condensed Consolidated Balance Sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term, and is included in Selling, administrative and other operating costs in the Condensed Consolidated Statement of Operations. During the nine months ended August 2, 2020, cash paid for the amount that was included in the measurement of operating lease liabilities was $8.8 million and the ROU assets obtained in exchange for operating lease liabilities was $1.7 million. The components of lease expense were as follows (in thousands):
(1) The Company's short term lease expense was minimal. Weighted average remaining lease terms and discount rates were as follows:
Maturities of operating lease liabilities as of August 2, 2020 were as follows (in thousands):
Maturities of operating leases accounted for under ASC 840 as of fiscal year-end 2019 were as follows (in thousands):
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Revenue Recognition All of the Company’s revenue and trade receivables are generated from contracts with customers. Revenue is recognized when control of the promised services is transferred to the Company's customers at an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company's revenue is recorded net of any sales or other similar taxes collected from its customers. Revenue Service Types Staffing Services Volt’s primary service is providing contingent (temporary) workers to its customers. These services are primarily provided through direct agreements with customers, and Volt provides these services using its employees and, in some cases, by subcontracting with other vendors of contingent workers. Volt’s costs in providing these services consist of the wages and benefits provided to the contingent workers as well as the recruiting costs, payroll department costs and other administrative costs. Direct Placement Services Direct placement services include providing qualified candidates to the Company's customers to hire on a permanent basis. Direct placement revenue is recognized net of a reserve for permanent placement candidates that do not remain with the customer through the contingency period, which is typically 60 days or less. This contingency is estimated based on historical data and recorded as a refund liability. Managed Service Programs ("MSP") The Company's MSP programs provide comprehensive solutions for delivery of contingent labor for assignment to customers, including supplier and worker sourcing, selecting, qualifying, on/off-boarding, time and expense recordation, reporting and approved invoicing and payment processing procedures. The Company’s fee for these MSP services is a fixed percentage of the staffing services spend that is managed through the program. Disaggregation of Revenues The following table presents our segment revenues disaggregated by service type (in thousands):
(1) Includes the revenues from Volt's Customer Care Solutions business through the time of exit in June 2019. Unsatisfied Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which they will recognize revenue at the amount to which it has the right to invoice for services performed. Unsatisfied performance obligations for contracts not meeting the aforementioned criteria are immaterial. Accounts Receivable, Contract Assets and Contract Liabilities The Company records accounts receivable when its right to consideration becomes unconditional and records a sales allowance as a liability. As of August 2, 2020, the change in the reserve balance from November 3, 2019 was minimal. Contract assets primarily relate to the Company's rights to consideration for services provided that are conditional on satisfaction of future performance obligations. The Company records contract liabilities when payments are made or due prior to the related performance obligations being satisfied. The current portion of contract liabilities is included in Accrued insurance and other in the Condensed Consolidated Balance Sheets. The Company does not have any material contract assets or long-term contract liabilities as of August 2, 2020 and November 3, 2019. Economic Factors The Company's operations are subject to variations in the economic condition and regulatory environment in their jurisdictions of operations. Adverse economic conditions may severely reduce the demand for the Company’s services and directly impact the revenue. In addition, the Company faces risks in complying with various legal requirements and unpredictable changes in both U.S. and foreign regulations which may have a financial impact on the business and operations. The global spread of COVID-19, or coronavirus, has created significant volatility, uncertainty and global macroeconomic disruption. This was due to related government actions, non-governmental agency recommendations and public perceptions, and disruption in global economic and labor market conditions. Our business, results of operations and financial condition have been and may continue to be adversely impacted by the coronavirus pandemic, and future adverse impacts could be material and are difficult to predict.
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss for the three and nine months ended August 2, 2020 were (in thousands):
There were no reclassifications from accumulated other comprehensive loss for the three and nine months ended August 2, 2020 and July 28, 2019.
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Restricted Cash and Short-Term Investments |
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Aug. 02, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash and Short-Term Investments | Restricted Cash and Short-Term Investments Restricted cash primarily includes amounts related to requirements under certain contracts with managed service program customers, for whom the Company manages the customers’ contingent staffing requirements, including processing of associate vendor billings into single, combined customer billings and distribution of payments to associate vendors on behalf of customers, as well as minimum cash deposits required to be maintained as collateral. Distribution of payments to associate vendors is generally made shortly after receipt of payment from customers, with undistributed amounts included in restricted cash and accounts payable between receipt and distribution of these amounts, where contractually required. At August 2, 2020 and November 3, 2019, restricted cash included $4.0 million and $9.3 million, respectively, restricted for payment to associate vendors, and $0.5 million in both periods, restricted for other collateral accounts. At August 2, 2020, restricted cash also included $16.9 million restricted under the Company’s long-term accounts receivable securitization program (“DZ Financing Program”) with DZ Bank AG Deutsche Zentral-Genossenschaftsbank (“DZ Bank”). This cash was restricted as it supplemented collateral provided by accounts receivable towards the Company’s aggregate borrowing base usage of $84.5 million, inclusive of $60.0 million outstanding and $24.5 million in issued letters of credit as of August 2, 2020. Short-term investments were $2.9 million and $3.0 million at August 2, 2020 and November 3, 2019, respectively. These short-term investments consisted primarily of the fair value of deferred compensation investments corresponding to employees’ selections, primarily in mutual funds, based on quoted prices in active markets.
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Income Taxes |
9 Months Ended |
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Aug. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision reflects the geographic mix of earnings in various federal, state and foreign tax jurisdictions and their applicable rates resulting in a composite effective tax rate. The Company’s cumulative results for substantially all United States (“U.S.”) and certain non-U.S. jurisdictions for the most recent three-year period is a loss. Accordingly, a valuation allowance has been established for substantially all loss carryforwards and other net deferred tax assets for these jurisdictions, resulting in an effective tax rate that is significantly different than the statutory rate. The Company adjusts its effective tax rate for each quarter to be consistent with the estimated annual effective tax rate, consistent with ASC 270, Interim Reporting, and ASC 740-270, Income Taxes – Intra Period Tax Allocation. Jurisdictions with a projected loss for the full year where no tax benefit can be recognized are excluded from the calculation of the estimated annual effective tax rate. The Company’s future effective tax rates could be affected by earnings being different than anticipated in countries with differing statutory rates, increases in recorded valuation allowances of tax assets, or changes in tax laws. The Company’s provision (benefit) for income taxes primarily includes foreign jurisdictions and state taxes. The income tax provision in the third quarters of fiscal 2020 and fiscal 2019 were $0.6 million and $0.2 million, respectively, primarily related to locations outside of the United States. For the first nine months ended August 2, 2020 and July 28, 2019, the income tax provision was $0.8 million and $0.7 million, respectively, primarily related to locations outside the United States. The Company’s quarterly provision (benefit) for income taxes is measured using an estimated annual effective tax rate, adjusted for discrete items that occur within the periods presented. The Company has analyzed the income tax impacts of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and has determined that it will not have a material impact to the Company.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company’s primary sources of liquidity are cash flows from operations and proceeds from its financing arrangements. Both operating cash flows and borrowing capacity under the Company’s financing arrangements are directly related to the levels of accounts receivable generated by its businesses. The Company’s operating cash flows consist primarily of collections of customer receivables offset by payments for payroll and related items for the Company’s contingent staff and in-house employees; federal, foreign, state and local taxes; and trade payables. The Company’s level of borrowing capacity under its financing arrangements increases or decreases in tandem with any change in accounts receivable based on revenue fluctuations. The Company manages its cash flow and related liquidity on a global basis. The weekly payroll payments inclusive of employment-related taxes and payments to vendors are approximately $15.0 million. The Company generally targets minimum global liquidity to be approximately 1.5 times its average weekly requirements. The Company also maintains minimum effective cash balances in foreign operations and uses a multi-currency netting and overdraft facility for its European entities to further minimize overseas cash requirements. On March 27, 2020, the U.S. government enacted the CARES Act which, among other things, permits the deferral of the employer’s portion of social security tax payments between March 27, 2020 and December 31, 2020. Further as a result of the economic repercussions of the COVID-19 pandemic, the Company experienced a reduction in both weekly payroll and related tax payments of approximately $3.0 million per week. The DZ Financing Program is fully collateralized by certain receivables of the Company that are sold to a wholly-owned, consolidated, bankruptcy-remote subsidiary. To finance the purchase of such receivables, that subsidiary may request that DZ Bank make loans from time-to-time to that subsidiary which are secured by liens on those receivables. On July 19, 2019, the Company amended and restated its DZ Financing Program, which was originally executed on January 25, 2018. The restated agreement allows for the inclusion of certain accounts receivable from originators in the United Kingdom, which added an additional $5.0 - $7.0 million in borrowing availability. All other material terms and conditions of the original agreement remain substantially unchanged. On January 14, 2020, the Company executed an amendment to the DZ Financing Program. The modifications to the agreement were to (1) extend the Amortization Date, as defined under the DZ Financing Program, from January 25, 2021 to January 25, 2023; (2) extend the Facility Maturity Date, as defined under the DZ Financing Program, from July 25, 2021 to July 25, 2023; and (3) revise an existing covenant to maintain positive net income in any fiscal year ending after 2020. All other terms and conditions remain unchanged. On March 12, 2020, the Company executed an amendment to the DZ Financing Program. The modifications to the agreement were to revise an existing covenant to maintain a Tangible Net Worth (“TNW”), as defined, from $40.0 million to $35.0 million through the Company’s fiscal quarter ending on or about July 31, 2020 and at least $40.0 million in each quarter thereafter. All other terms and conditions remain unchanged. On June 11, 2020, the Company amended the DZ Financing Program. The modifications to the agreement were to (1) replace an existing TNW covenant requirement, as defined, to a minimum TNW of $20.0 million through the Company's fiscal quarter ending on or about July 31, 2021 and $40.0 million in each quarter thereafter, and (2) reduce the Maximum Facility Amount, as defined, from $115.0 million to $100.0 million. All other terms and conditions remain unchanged. Loan advances may be made under the DZ Financing Program through January 25, 2023 and all loans will mature no later than July 25, 2023. Loans will accrue interest (i) with respect to loans that are funded through the issuance of commercial paper notes, at the commercial paper (“CP”) rate, and (ii) otherwise, at a rate per annum equal to adjusted LIBOR. The CP rate will be based on the rates paid by the applicable lender on notes it issues to fund related loans. Adjusted LIBOR is based on LIBOR for the applicable interest period and the rate prescribed by the Board of Governors of the Federal Reserve System for determining the reserve requirements with respect to Eurocurrency funding. If an event of default occurs, all loans shall bear interest at a rate per annum equal to the prime rate (the federal funds rate plus 3%) plus 2.5%. The DZ Financing Program also includes a letter of credit sub-facility with a sub-limit of $35.0 million. As of August 2, 2020, the letter of credit participation was $24.5 million inclusive of $23.3 million for the Company’s casualty insurance program and $1.2 million for the security deposit required under certain real estate lease agreements. The DZ Financing Program contains customary representations and warranties as well as affirmative and negative covenants. The agreement also contains customary default, indemnification and termination provisions. The DZ Financing Program is not an off-balance sheet arrangement, as the bankruptcy-remote subsidiary is a 100%-owned consolidated subsidiary of the Company. The Company is subject to certain financial and portfolio performance covenants under the DZ Financing Program, including (1) a minimum TNW, as defined under the DZ Financing Program, of at least $20.0 million through the Company's fiscal quarter ending on or about July 31, 2021 and at least $40.0 million for each quarter thereafter; (2) positive net income in any fiscal year ending after 2020; (3) maximum debt to tangible net worth ratio of 3:1; and (4) a minimum of $15.0 million in liquid assets, as defined under the DZ Financing Program. At August 2, 2020, the Company was in compliance with all debt covenants. At August 2, 2020, there was $5.1 million of borrowing availability, as defined under the DZ Financing Program. At August 2, 2020, the Company had outstanding borrowings under the DZ Financing Program of $60.0 million with a weighted average annual interest rate of 2.0% during the third quarter of fiscal 2020 and 2.8% for the first nine months of fiscal 2020. At July 28, 2019, the Company had outstanding borrowings under the DZ Financing program of $55.0 million, with a weighted average annual rate of 4.2% during both the third quarter of fiscal 2019 and the first nine months of fiscal 2019. Long-term debt consists of the following (in thousands):
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Earnings (Loss) Per Share |
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Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic and diluted net loss per share are calculated as follows (in thousands, except per share amounts):
The diluted earnings per share for the three and nine months ended August 2, 2020 did not include the effect of potentially dilutive outstanding shares comprised of 1,006,798 RSUs (defined below), 331,944 stock options and 209,662 PSUs (defined below) because the effect would have been anti-dilutive. The diluted earnings per share for the three and nine months ended July 28, 2019 did not include the effect of potentially dilutive outstanding shares comprised of 632,240 RSUs, 636,664 stock options and 355,318 PSUs because the effect would have been anti-dilutive.
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Share-Based Compensation Plans |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Plans | Share-Based Compensation Plans For the three and nine months ended August 2, 2020, the Company recognized share-based compensation expense of $0.4 million and $1.1 million, respectively. For the three and nine months ended July 28, 2019, the Company recognized share-based compensation expense of $0.6 million and $1.3 million, respectively. These expenses are included in Selling, administrative and other operating costs in the Company’s Condensed Consolidated Statements of Operations. Fiscal 2020 Awards During fiscal 2020, the Company granted restricted stock units (“RSUs”) to executive management and, due to limited share availability under its long-term incentive plan, issued deferred cash awards to certain employees including executive management. The RSUs and cash awards vest in equal annual tranches over three years, provided the employees remain employed with the Company on the applicable vesting date. The grant date fair value for the RSUs is measured using the closing stock price on the grant date and the total grant date fair value was $0.7 million. The deferred cash awards totaled $2.2 million. In addition, due to limited share availability, cash payments in the aggregate amount of $0.4 million were made in lieu of equity awards to non-executive directors of the Company. Fiscal 2019 Awards During fiscal 2019, the Company granted performance stock units (“PSUs”) to executive management, RSUs to certain employees including executive management and its annual equity grant of RSUs to the Board of Directors. The PSUs are eligible to vest in equal tranches at the end of each performance period. Vesting of the PSUs is dependent on the achievement of the adjusted Earnings Before Interest, Taxes, Depreciation and Amortization margin percentage goals based on adjusted revenues at the end of each fiscal year of the one-year, two-year and three-year performance periods and provided that the employees remain employed with the Company on the applicable vesting date. The payout percentages can range from 0% to 150%. The RSUs for the employees vest in equal annual tranches over three years, provided the employees remain employed with the Company on the applicable vesting date. The RSUs for the Board of Directors vest one year from the grant date provided that the director provides continued service through the vesting date. The grant date fair value for the PSUs and RSUs is measured using the closing stock price on the grant date. The PSUs and RSUs had a total grant date fair value of approximately $1.2 million and $2.1 million, respectively. Fiscal 2018 Awards During fiscal 2018, the Company granted PSUs and RSUs that are classified as a liability at fair value, which is computed using a Monte Carlo simulation and re-measured periodically based on the effect that the market condition has on these awards. The liability and corresponding expense is adjusted accordingly until the awards are settled. As of the third quarter ended August 2, 2020, the total fair value of the remaining PSUs and RSUs were minimal. Summary of Equity and Liability Awards The following tables summarize the activities related to the Company’s share-based equity and liability awards for the nine months ended August 2, 2020:
For the nine months ended August 2, 2020, there was no exercise of stock options. As of August 2, 2020, total unrecognized compensation expense of $1.6 million related to PSUs, stock options and RSUs will be recognized over the remaining weighted average vesting period of 2.2 years of which $0.3 million, $0.9 million, $0.3 million and less than $0.1 million are expected to be recognized in fiscal 2020, 2021, 2022 and 2023, respectively.
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Restructuring and Severance Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Severance Charges | Restructuring and Severance Charges The Company incurred total restructuring and severance costs of $0.5 million and $2.0 million in the third quarter of fiscal 2020 and 2019, respectively, and $2.2 million and $2.8 million for the nine months ended August 2, 2020 and July 28, 2019, respectively. 2020 Restructuring Plan In the first quarter of fiscal 2020, the Company approved a restructuring plan (the “2020 Plan”) as part of its strategic initiative to optimize the Company’s cost infrastructure. The 2020 Plan will leverage the global capabilities of the Company's staffing operations based in Bangalore, India and offshore a significant number of strategically identified roles to this location. The total costs incurred in the first nine months of fiscal 2020 in connection with the 2020 Plan were $1.1 million, consisting of $0.1 million in North American Staffing, $0.1 million in International Staffing and $0.9 million in the Corporate and Other category. As of August 2, 2020, the Company anticipates payments of $0.1 million will be made through the remainder of fiscal 2020. 2018 Restructuring Plan On October 16, 2018, the Company approved a restructuring plan (the “2018 Plan”) based on an organizational and process redesign intended to optimize the Company’s strategic growth initiatives and overall business performance. In connection with the 2018 Plan, the Company incurred restructuring charges comprised of severance and benefit costs and facility and lease termination costs. The 2018 Plan was completed by the end of fiscal 2019. The total costs since inception through August 2, 2020 were $5.5 million, consisting of $1.1 million in North American Staffing, $0.4 million in International Staffing and $4.0 million in Corporate and Other. Change in Executive Management Effective June 6, 2018, Michael Dean departed from his role as President and Chief Executive Officer of the Company and is no longer a member of the Board of Directors. The Company and Mr. Dean subsequently executed a separation agreement, effective June 29, 2018. The Company incurred related severance costs of $2.6 million in the third quarter of fiscal 2018, which was payable over a period of 24 months. Effective August 23, 2019, Paul Tomkins stepped down from his role as Senior Vice President and Chief Financial Officer of the Company. The Company and Mr. Tomkins subsequently executed a separation agreement, effective September 11, 2019. The Company incurred related severance costs of $0.9 million in the fourth quarter of fiscal 2019, which is payable over a period of 12 months beginning November 2019. Exit of Customer Care Solutions Business In June 2019, the Company exited its customer care solutions business, which was reported as a part of the Corporate and Other category. This exit allows the Company to further strengthen its focus on its core staffing business and align its resources to streamline operations, improve cost competitiveness and increase profitability. As a result of this exit, the Company incurred restructuring and severance costs of $1.7 million during the first nine months of fiscal 2019. Other Restructuring Costs During the third quarter of fiscal 2020, there were other restructuring actions taken by the Company as part of its continued efforts to reduce costs and to offset COVID-19 related revenue losses. The Company recorded severance costs of $0.6 million primarily resulting from the elimination of certain positions. Accrued restructuring and severance costs are included in Accrued compensation and Accrued insurance and other in the Condensed Consolidated Balance Sheets. Activity for the first nine months of fiscal 2020 is summarized as follows (in thousands):
Upon adoption of ASC 842 Leases, $2.0 million of accrued restructuring related to the exit of leased real estate was reclassified as a reduction to the related ROU asset, per the accounting guidance. The remaining balance as of August 2, 2020 of $0.4 million, primarily related to Corporate and Other, includes $0.2 million related to the change in executive management, $0.1 million related to the 2020 Plan and $0.1 million related to other restructuring costs.
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Impairment Charges |
9 Months Ended |
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Aug. 02, 2020 | |
Impairment or Disposal of Tangible Assets Disclosure [Abstract] | |
Impairment Charges | Impairment Charges Long-lived assets primarily consist of right-of-use assets, capitalized software costs, leasehold improvements and office equipment. The Company reviews these assets for impairment under Accounting Standards Codification 360 Property, Plant and Equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the estimated undiscounted cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment loss is recognized, the carrying amount of the asset is reduced to its estimated fair value based on discounted cash flow analysis or other valuation techniques. Due to the economic impact and continued uncertainty related to the COVID-19 pandemic, certain real estate rationalization decisions were made in the quarter resulting in the Company consolidating and exiting certain leased office locations throughout North America based on where the Company could be fully operational and successfully support its clients and business operations remotely. The changes in the use of these right-of-use assets triggered an impairment review and based on the results of this review, the Company recorded an impairment charge of $2.4 million to reduce the carrying value of these assets to their estimated fair value. Significant assumptions used to estimate fair value were the current economic environment, real estate market conditions and general market participant assumptions. Impairment charges incurred in the third quarter of fiscal 2020 were $1.8 million for the North American Staffing segment and $0.6 million for the Corporate and Other category.
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Commitments and Contingencies |
9 Months Ended |
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Aug. 02, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is involved in various claims and legal actions arising in the ordinary course of business. The Company’s loss contingencies not discussed elsewhere consist primarily of claims and legal actions arising in the normal course of business related to contingent worker employment matters in the staffing services segments. These matters are at varying stages of investigation, arbitration or adjudication. The Company has accrued for losses on individual matters that are both probable and reasonably estimable. Estimates are based on currently available information and assumptions. Significant judgment is required in both the determination of probability and the determination of whether a matter is reasonably estimable. The Company’s estimates may change and actual expenses could differ in the future as additional information becomes available.
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Related Party Transactions |
9 Months Ended |
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Aug. 02, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsFor the nine months ended August 2, 2020, the Company provided staffing services in the aggregate amount of $130,000 to a company where Volt's Chairman of the Board, William J. Grubbs, serves as President. |
Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | Segment Data We report our segment data in accordance with the provisions of ASC 280, Segment Reporting, aligning with the way the Company evaluates its business performance and manages its operations. Our current reportable segments are (i) North American Staffing, (ii) International Staffing and (iii) North American MSP. The non-reportable businesses are combined and disclosed with corporate services under the category Corporate and Other. In June 2019, the Company exited its customer care solutions business, which was reported as a part of the Corporate and Other category. This exit allows the Company to further strengthen its focus on its core staffing business and align its resources to streamline operations, improve cost competitiveness and increase profitability. The Company’s other non-reportable businesses will continue to be combined and disclosed with corporate services under the category Corporate and Other. Segment operating income (loss) is comprised of segment net revenue less cost of services, selling, administrative and other operating costs, restructuring and severance costs, and impairment charges. The Company allocates to the segments all operating costs except for costs not directly related to the operating activities such as corporate-wide general and administrative costs. These costs are not allocated because doing so would not enhance the understanding of segment operating performance and are not used by management to measure segment performance. Financial data concerning the Company’s segment revenue and operating income (loss) as well as results from Corporate and Other are summarized in the following tables (in thousands):
(1) Revenues are primarily derived from Volt Customer Care Solutions business through June 7, 2019. (2) The majority of intersegment sales results from North American Staffing segment providing resources to Volt Customer Care Solutions business.
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Basis of Presentation (Policies) |
9 Months Ended |
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Aug. 02, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements of Volt Information Sciences, Inc. (“Volt” or the “Company”) have been prepared in conformity with generally accepted accounting principles ("GAAP"), consistent in all material respects with those applied in the Annual Report on Form 10-K for the year ended November 3, 2019. The Company makes estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates and changes in estimates are reflected in the period in which they become known. Accounting for certain expenses, including income taxes, is based on full year assumptions, and the financial statements reflect all normal adjustments that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The interim information is unaudited and is prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), which provides for omission of certain information and footnote disclosures. This interim financial information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended November 3, 2019.
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements New Accounting Standards Not Yet Adopted by the Company In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Company intends to apply ASU 2020-04 in the first quarter of fiscal 2021 and does not anticipate a significant impact on its consolidated financial statements upon adoption. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of Accounting Standards Codification (“ASC”) 820. ASU 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU 2018-13. ASU 2018-13 is effective for the Company in the first quarter of fiscal 2021. The Company does not anticipate a significant impact on the consolidated financial statements upon adoption. In June 2016, the FASB issued ASU 2016-13 (ASC Topic 326), as clarified in ASU 2019-04, ASU 2019-05, ASU 2019-11, and ASU 2018-19, amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. Under this model, an entity recognizes an allowance for expected credit losses based on historical experience, current conditions and forecasted information rather than the current methodology of delaying recognition of credit losses until it is probable a loss has been incurred. The amendments are effective for fiscal years beginning after December 15, 2022, which for the Company will be the first quarter of fiscal 2024. Although the impact upon adoption will depend on the financial instruments held by the Company at that time, the Company does not anticipate a significant impact on its consolidated financial statements based on the instruments currently held and its historical trend of bad debt expense relating to trade accounts receivable. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s consolidated financial statements and related disclosures. Recently Adopted by the Company In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the guidance in Topic 718 to include share-based payments for goods and services to non-employees and generally aligns it with the guidance for share-based payments to employees. ASU 2018-07 was effective for the Company in the first quarter of fiscal 2020 and the adoption of this guidance had no impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). This ASU requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. This ASU was effective in the first quarter of fiscal 2020 resulting in the Company recording right-of-use (“ROU”) assets and lease liabilities on the consolidated balance sheet. The adoption of this standard did not have a material impact on the consolidated financial statements of operations and consolidated statements of cash flows. For the impact on the Company's consolidated financial statements, refer to Note 3 - Leases.All other ASUs that became effective for Volt in the first nine months of fiscal 2020 were not applicable to the Company at this time and therefore, did not have any impact during the period.
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Leases | Leases The Company adopted ASC 842, Leases on November 4, 2019 using the modified transition method without retrospective application to comparative periods. The Company elected the package of three practical expedients allowed for under the transition guidance. Accordingly, the Company did not reassess: (1) whether any expired or existing contracts are/or contain leases; (2) the lease classification for any expired or existing leases; or (3) initial direct costs for any existing leases. The Company has also elected not to recognize ROU assets and lease liabilities for short-term leases that have a term of 12 months or less. The Company’s material operating leases consist of branch locations, as well as corporate office space. Our leases have remaining terms of 1 - 11 years. The lease term is the minimum of the non-cancelable period of the lease or the lease term inclusive of reasonably certain renewal option periods. Volt determines if an arrangement meets the criteria of a lease at inception, at which time it also performs an analysis to determine whether the lease qualifies as operating or financing. The Company does not currently have any finance leases. Upon adoption, the Company recorded approximately $47.2 million of ROU assets and $52.0 million of lease liabilities related to operating leases in the Condensed Consolidated Balance Sheet. At transition, the ROU asset was measured at the initial amount of the lease liability adjusted for any deferred rent and cease-use liabilities. The Company also recognized a $22.2 million cumulative-effect adjustment to retained earnings related to the deferred gain on the sale and leaseback of real estate. This gain was previously being amortized at approximately $0.5 million per quarter as an offset to rent expense in the Condensed Consolidated Statements of Operations. Since the Company has a full valuation allowance against its deferred tax assets, the impact is a reduction to our deferred tax assets and related valuation allowance, which resulted in no tax impact to the net change to equity. Operating lease liabilities represent the present value of lease payments not yet paid. ROU assets represent Volt's right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepaid or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. As the rate implicit in the lease is not readily determinable, the Company used its incremental borrowing rates based on the information available at the lease commencement date in determining the present value of lease payments. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each as a single lease component, for all underlying asset classes. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance, tax payments and other miscellaneous costs. The variable portion of lease payments is not included in the ROU assets or lease liabilities. Rather, variable payments, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred and are included in lease expenses. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. Operating leases are included in Right of use assets - operating leases and Operating lease liabilities, current and long-term, in the Condensed Consolidated Balance Sheet. Lease expense for operating leases is recognized on a straight-line basis over the lease term, and is included in Selling, administrative and other operating costs in the Condensed Consolidated Statement of Operations.
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Revenue Recognition | Revenue Recognition All of the Company’s revenue and trade receivables are generated from contracts with customers. Revenue is recognized when control of the promised services is transferred to the Company's customers at an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. The Company's revenue is recorded net of any sales or other similar taxes collected from its customers. Revenue Service Types Staffing Services Volt’s primary service is providing contingent (temporary) workers to its customers. These services are primarily provided through direct agreements with customers, and Volt provides these services using its employees and, in some cases, by subcontracting with other vendors of contingent workers. Volt’s costs in providing these services consist of the wages and benefits provided to the contingent workers as well as the recruiting costs, payroll department costs and other administrative costs. Direct Placement Services Direct placement services include providing qualified candidates to the Company's customers to hire on a permanent basis. Direct placement revenue is recognized net of a reserve for permanent placement candidates that do not remain with the customer through the contingency period, which is typically 60 days or less. This contingency is estimated based on historical data and recorded as a refund liability. Managed Service Programs ("MSP") The Company's MSP programs provide comprehensive solutions for delivery of contingent labor for assignment to customers, including supplier and worker sourcing, selecting, qualifying, on/off-boarding, time and expense recordation, reporting and approved invoicing and payment processing procedures. The Company’s fee for these MSP services is a fixed percentage of the staffing services spend that is managed through the program.
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Leases (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease expense were as follows (in thousands):
(1) The Company's short term lease expense was minimal.
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Schedule of Weighted Average Information | Weighted average remaining lease terms and discount rates were as follows:
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Schedule of Operating Lease Maturities, Topic 842 | Maturities of operating lease liabilities as of August 2, 2020 were as follows (in thousands):
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Schedule of Operating Lease Maturities, Topic 840 | Maturities of operating leases accounted for under ASC 840 as of fiscal year-end 2019 were as follows (in thousands):
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Revenues Disaggregated by Service Type | The following table presents our segment revenues disaggregated by service type (in thousands):
(1) Includes the revenues from Volt's Customer Care Solutions business through the time of exit in June 2019.
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Accumulated Other Comprehensive Loss (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Loss | The changes in accumulated other comprehensive loss for the three and nine months ended August 2, 2020 were (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt consists of the following (in thousands):
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Earnings (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Net Loss per Share | Basic and diluted net loss per share are calculated as follows (in thousands, except per share amounts):
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Share-Based Compensation Plans (Tables) |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Payment Award Activity | The following tables summarize the activities related to the Company’s share-based equity and liability awards for the nine months ended August 2, 2020:
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Restructuring and Severance Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Activity | Activity for the first nine months of fiscal 2020 is summarized as follows (in thousands):
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Segment Data (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Sales and Segment Operating Income (Loss) by Reportable Operating Segment | Financial data concerning the Company’s segment revenue and operating income (loss) as well as results from Corporate and Other are summarized in the following tables (in thousands):
(1) Revenues are primarily derived from Volt Customer Care Solutions business through June 7, 2019. (2) The majority of intersegment sales results from North American Staffing segment providing resources to Volt Customer Care Solutions business.
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Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Aug. 02, 2020 |
Aug. 02, 2020 |
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Leases [Abstract] | ||
Operating lease expense | $ 2,827 | $ 8,751 |
Sublease income | (394) | (1,183) |
Variable lease expense | 213 | 482 |
Total | $ 2,646 | $ 8,050 |
Leases - Weighted Average Lease Information (Details) |
Aug. 02, 2020 |
---|---|
Leases [Abstract] | |
Weighted average remaining lease term (years) | 8 years 1 month 6 days |
Weighted average discount rate | 6.30% |
Leases - Lease Maturities (Details) - USD ($) $ in Thousands |
Aug. 02, 2020 |
Nov. 04, 2019 |
Nov. 03, 2019 |
---|---|---|---|
Fiscal Year, After Adoption of Topic 842 | |||
Remainder of 2020 | $ 2,786 | ||
2021 | 9,476 | ||
2022 | 7,901 | ||
2023 | 6,786 | ||
2024 | 5,595 | ||
Thereafter | 28,150 | ||
Total future lease payments | 60,694 | ||
Less: Imputed interest | 13,700 | ||
Total operating lease liabilities | $ 46,994 | $ 52,000 | |
Fiscal Year, Before Adoption of Topic 842 | |||
2020 | $ 11,782 | ||
2021 | 9,287 | ||
2022 | 7,457 | ||
2023 | 6,328 | ||
2024 | 5,486 | ||
Thereafter | 28,422 | ||
Total future lease payments | $ 68,762 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands |
Aug. 02, 2020 |
Nov. 03, 2019 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 0 | $ 0 |
Long-term contract liabilities | $ 0 | $ 0 |
Accumulated Other Comprehensive Loss - Schedule of Changes in AOCL (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Aug. 02, 2020 |
Aug. 02, 2020 |
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AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
BEGINNING BALANCE | $ 42,946 | $ 36,189 |
ENDING BALANCE | 40,260 | 40,260 |
AOCI Attributable to Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
BEGINNING BALANCE | (7,039) | (6,801) |
ENDING BALANCE | (6,306) | (6,306) |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Other comprehensive income | $ 733 | $ 495 |
Accumulated Other Comprehensive Loss - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
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Equity [Abstract] | ||||
Reclassifications from accumulated other comprehensive loss | $ 0 | $ 0 | $ 0 | $ 0 |
Restricted Cash and Short-Term Investments - Narrative (Details) - USD ($) $ in Millions |
Aug. 02, 2020 |
Nov. 03, 2019 |
Jul. 28, 2019 |
---|---|---|---|
DZ Financing Program | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 16.9 | ||
Aggregate borrowing base usage | 84.5 | ||
Long-term debt | 60.0 | $ 55.0 | |
Restricted cash and short-term investments | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Short-term investments | 2.9 | $ 3.0 | |
Short-Term Credit Facility | Restricted cash and short-term investments | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted as collateral | 0.5 | 0.5 | |
Letter of Credit | DZ Financing Program | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Line of credit, amount outstanding | 24.5 | ||
Associated Vendors | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 4.0 | $ 9.3 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 556 | $ 165 | $ 774 | $ 671 |
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Aug. 02, 2020 |
Nov. 03, 2019 |
Jul. 28, 2019 |
---|---|---|---|
Less: | |||
Total long-term debt, net | $ 58,930 | $ 53,894 | |
DZ Financing Program | |||
Extinguishment of Debt [Line Items] | |||
Financing programs | 60,000 | $ 55,000 | |
Short Term Financing Program | DZ Financing Program | |||
Extinguishment of Debt [Line Items] | |||
Financing programs | 60,000 | 55,000 | |
Less: | |||
Deferred financing fees | 1,070 | 1,106 | |
Total long-term debt, net | $ 58,930 | $ 53,894 |
Earnings (Loss) Per Share - Summary of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 02, 2020 |
May 03, 2020 |
Feb. 02, 2020 |
Jul. 28, 2019 |
Apr. 28, 2019 |
Jan. 27, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Numerator | ||||||||
Net loss | $ (4,837) | $ (5,425) | $ (10,808) | $ (6,057) | $ (5,165) | $ (3,215) | $ (21,070) | $ (14,437) |
Denominator | ||||||||
Basic weighted average number of shares (shares) | 21,589 | 21,157 | 21,474 | 21,106 | ||||
Dilutive weighted average number of shares (shares) | 21,589 | 21,157 | 21,474 | 21,106 | ||||
Net loss per share: | ||||||||
Basic (usd per share) | $ (0.22) | $ (0.29) | $ (0.98) | $ (0.68) | ||||
Diluted (usd per share) | $ (0.22) | $ (0.29) | $ (0.98) | $ (0.68) |
Earnings (Loss) Per Share - Narrative (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from EPS (shares) | 1,006,798 | 632,240 | 1,006,798 | 632,240 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from EPS (shares) | 331,944 | 636,664 | 331,944 | 636,664 |
Performance Share Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from EPS (shares) | 209,662 | 355,318 | 209,662 | 355,318 |
Restructuring and Severance Charges - Summary of Accrued Restructuring and Severance Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Aug. 02, 2020 |
Jul. 28, 2019 |
Nov. 04, 2019 |
|
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of year | $ 3,845 | $ 1,881 | ||||
Cease use liabilities transferred to ROU assets | $ (1,964) | |||||
Charged to expense | $ 546 | $ 2,017 | 2,203 | 2,203 | $ 2,800 | |
Cash payments | (3,642) | |||||
Ending Balance | $ 442 | $ 442 | $ 442 |
Impairment Charges - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Property, Plant and Equipment [Line Items] | ||||
Impairment charges | $ 2,384 | $ 79 | $ 2,395 | $ 426 |
Operating Segments | North American Staffing | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment charges | 1,803 | 0 | 1,814 | 0 |
Corporate and Other | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment charges | $ 581 | $ 79 | $ 581 | $ 426 |
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 02, 2020 |
Jul. 28, 2019 |
Aug. 02, 2020 |
Jul. 28, 2019 |
|
Related Party Transaction [Line Items] | ||||
Staffing services, aggregate amount | $ 185,941 | $ 233,176 | $ 610,982 | $ 738,682 |
Staffing Services | ||||
Related Party Transaction [Line Items] | ||||
Staffing services, aggregate amount | $ 178,829 | $ 223,754 | 588,304 | $ 701,893 |
Related Party | Chairman of the Board | Staffing Services | ||||
Related Party Transaction [Line Items] | ||||
Staffing services, aggregate amount | $ 130 |
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