-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nb26ZAwYpd9Sf5MTsR1m5VW4bBPhDnEwaiYYRoC9ATe7/jDSm4SdDScuNKerCvdS C0ZeN4DYM+NEGK14YIMn6Q== 0001157523-06-009066.txt : 20060908 0001157523-06-009066.hdr.sgml : 20060908 20060908091227 ACCESSION NUMBER: 0001157523-06-009066 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060908 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060908 DATE AS OF CHANGE: 20060908 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOLT INFORMATION SCIENCES, INC. CENTRAL INDEX KEY: 0000103872 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 135658129 STATE OF INCORPORATION: NY FISCAL YEAR END: 1030 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09232 FILM NUMBER: 061080454 BUSINESS ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 BUSINESS PHONE: 2127042400 MAIL ADDRESS: STREET 1: 560 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022-2928 FORMER COMPANY: FORMER CONFORMED NAME: VOLT INFORMATION SCIENCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VOLT TECHNICAL CORP DATE OF NAME CHANGE: 19680913 8-K 1 a5223427.txt VOLT INFORMATION SCIENCES, INC. 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): September 8, 2006 VOLT INFORMATION SCIENCES, INC. (Exact Name of Registrant as Specified in Its Charter) New York 1-9232 13-5658129 - ----------------------------- ----------------------- --------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 560 Lexington Avenue, New York, New York 10022 - ------------------------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) (212) 704-2400 (Registrant's Telephone Number, Including Area Code) Not Applicable (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. The information in this Form 8-K, including the Exhibit attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as expressly set forth by specific reference in such filing. On September 8, 2006, the Company issued a press release announcing its results of operations for the third quarter and nine months ended July 30, 2006. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (a) Financial statements of businesses acquired: Not applicable. (b) Pro forma financial information: Not applicable. (c) Exhibits: 99.1 Volt Information Sciences, Inc. Press Release dated September 8, 2006. S I G N A T U R E Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VOLT INFORMATION SCIENCES, INC. Date September 8, 2006 By: /s/ Jack Egan ------------------------------------- Jack Egan, Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - ------- ----------- 99.1 Volt Information Sciences, Inc. Press Release dated September 8, 2006 EX-99.1 2 a5223427ex991.txt EXHIBIT 99.1 Exhibit 99.1 Volt Information Sciences Reports Third Quarter Results, Announces Authorization for Share Repurchase Program and Stock Incentive Plan NEW YORK--(BUSINESS WIRE)--Sept. 8, 2006--Volt Information Sciences, Inc. (NYSE: VOL) today reported financial results for the Company's third quarter and nine months ended July 30, 2006. Volt will conduct a conference call webcast at 11:00 A.M. (EDT) today to discuss third quarter results. The conference call dial-in number is 1-800-857-6028 (domestic) or 1-210-234-0013 (international), passcode: Third Quarter. The conference call will be broadcast live over the Internet and can be accessed for the next 30 days at http://www.volt.com/investor/press_release.cfm. Attached is a summary of the Company's results of operations and the notes thereto. The notes are an integral part of the summary. THIRD QUARTER - FISCAL 2006 RESULTS For the third quarter of fiscal 2006 ended July 30, 2006, the Company reported net income of $8.4 million, or $0.53 per share, compared to $5.0 million, or $0.32 per share, in the fiscal 2005 third quarter, an increase of 68%. Net sales for the 2006 quarter increased by 8% to $584.9 million, compared to $543.5 million in last year's comparable quarter. Income before minority interest and income taxes increased by $4.5 million, or 45%, compared to the 2005 comparable quarter. The minority interest was repurchased from Nortel Networks, Inc. on December 29, 2005. NINE MONTHS - FISCAL 2006 RESULTS For the first nine months of fiscal 2006, the Company reported net income of $17.1 million, or $1.11 per share, compared to net income of $8.7 million, or $0.56 per share, in the comparable fiscal 2005 period, an increase of 97%. Net sales for the first nine months of fiscal 2006 increased by 9% to $1.7 billion, compared to $1.6 billion in last year's comparable period. Income before minority interest and income taxes was $30.1 million in the nine months ended July 30, 2006 compared to $19.2 million in the comparable fiscal 2005 period, an increase of 57%. Commenting on the results for the third quarter, Mr. Steven A. Shaw, President and CEO of Volt, stated "We are very pleased with the quarter's results and the continued trends in our businesses, especially in the Staffing Services segment. While increased interest and securitization expense, due to financing levels, rising interest rates and higher year over year professional fees related to Sarbanes-Oxley compliance programs negatively impacted earnings, strong growth for our higher margin Staffing offerings, as well as lower workers compensation and payroll taxes, were the primary factors for the more than doubling of the profits of the Staffing group, and were key drivers in the 34% growth in total segments operating profit. Telecommunications Services reported lower quarterly losses as a result of the reorganization and realignment of the segment. We are extremely pleased by the initiatives deployed and believe the segment is poised for future profitability. The Directory Services segment, whose quarterly results are affected by the timing of the distribution of directories, continues to produce consistent operating results. The Computer Systems acquisition of Varetis in the first quarter, while not yet contributing to the bottom line, combined with the Directory Operator Services business acquired from Nortel Networks and VoltDelta's existing technology, provides us with the strategic resources necessary to deliver a fully integrated end to end global solution and positions the segment well for future growth." STAFFING SERVICES The $49.1 million, or 11%, increase in sales in the third quarter of fiscal 2006 from the comparable fiscal 2005 period was due to increased staffing business in both the Technical Placement and the Administrative and Industrial divisions. The increase in operating profit of $9.3 million was due to the increase in sales, an increase in gross margin percentage, primarily due to reduced workers' compensation and payroll tax costs, and a decrease in overhead costs as a percentage of sales. The segment has been working closely with customers to better manage worker's compensation costs which are approximately $2.5 million below last year's run rate per quarter. COMPUTER SYSTEMS The Computer Systems segment's sales increase of $2.5 million, or 6%, in the third quarter of fiscal 2006 over the comparable 2005 period was primarily due to increases in the Maintech division's IT maintenance sales of $1.7 million, or 14%, and $4.2 million of new business as a result of the segment's acquisition of Varetis Solutions in December 2005, partially offset by decreases in the segment's other divisions. The decrease in operating profit of $2.0 million was due to decreased gross margins, an increase in overhead necessary to support the sales increase and additional amortization of intangible assets. TELEPHONE DIRECTORY The Telephone Directory segment's sales decrease of $2.5 million, or 10%, for the third quarter of fiscal 2006 from the comparable 2005 period resulted from decreases of $1.6 million, or 9%, in the Datanational community telephone directory publishing sales and $1.4 million, or 34%, in the telephone production operations and other sales. The decrease in sales is due to the timing of the delivery of the directories and the sale of the ViewTech division in the third quarter of fiscal 2005. The segment's operating profit decreased by $1.4 million, or 24%, primarily due to the decrease in sales along with a decrease in gross margins. TELECOMMUNICATIONS SERVICES The Telecommunications Services segment's sales decrease of $8.3 million, or 27%, in the third quarter of fiscal 2006 over the comparable 2005 period was due to decreases of $5.4 million in the Construction and Engineering division and $2.9 million in the Network Enterprise Solutions division. The improvement in operating results of $0.8 million over the same period was due to decreases in overhead costs and an increase in gross margins partially offset by the decrease in sales. GENERAL CORPORATE EXPENSES The increase in General Corporate expenses compared to the 2005 quarter was related to higher professional fees and costs related to compliance with the Sarbanes-Oxley Act along with expenses necessary to meet the disaster recovery redundancy requirements for business continuity and communications. CASH AND CASH EQUIVALENTS Cash and cash equivalents, excluding restricted cash, was $45.3 million at the end of the quarter. At July 30, 2006, the Company had sold a participating interest in accounts receivable of $110.0 million under its securitization program and had the ability to finance an additional $90.0 million under the facility. In August 2006, the agreement was amended to extend the maturity date to April 2009. In addition, the Company may borrow under a $40.0 million revolving secured credit facility. The facility requires the maintenance of certain accounts receivable balances in excess of borrowings and terminates in April 2008 unless extended. At July 30, 2006, the Company had borrowed $6.4 million (five million Euros) under the facility. VOLT INFORMATION SCIENCES, INC. 2006 INCENTIVE STOCK PLAN AND SHARE BUYBACK The Company also announced that on September 6, 2006 its Board of Directors adopted the "Volt Information Sciences, Inc. 2006 Incentive Stock Plan" subject to approval by vote of shareholders of the Company. The purpose of the Plan is to promote the success of the Company and its Subsidiaries by providing incentives to Employees and Non-Employee Directors that will promote the long-term financial success of the Company and growth in shareholder value. The Plan is designed to provide flexibility to the Company and its Subsidiaries, in its ability to motivate, attract, and retain the services of Employees and Non-Employee Directors upon whose judgment, interest, and effort the successful conduct of its operation is largely dependent. The Plan permits the grant of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock and Restricted Stock Units to Employees and Non-Employee Directors of the Company through September 6, 2016. The maximum aggregate number of Shares that may be issued pursuant to awards made under the Plan shall not exceed One Million Five Hundred Thousand (1,500,000) Shares. The Company also announced that on September 6, 2006 its Board of Directors had also authorized the repurchase of up to One Million Five Hundred Thousand (1,500,000) shares of the Company's Common Stock from time to time in open market or private transactions at the Company's discretion, subject to market conditions and other factors, in order to fund awards under the "Volt Information Sciences, Inc. 2006 Incentive Stock Plan". The timing and exact number of shares purchased will be at the Company's discretion and will depend on market conditions and is subject to institutional approval for purchases in excess of $8.5 million in fiscal year 2006 under the terms of the Company's credit agreements. This stock buyback program does not obligate the Company to acquire any specific number of shares and may be suspended or discontinued at any time. Volt Information Sciences, Inc. is a leading national provider of Staffing Services and Telecommunications and Information Solutions with a Fortune 100 customer base. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. For additional information, please visit Volt's web site at http://www.volt.com. This press release contains forward-looking statements which are subject to a number of known and unknown risks, including general economic, competitive and other business conditions, the degree and timing of customer utilization and the rate of renewals of contracts with the Company, that could cause actual results, performance and achievements to differ materially from those described or implied in the forward-looking statements. Information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Company reports filed with the Securities and Exchange Commission. Copies of the Company's latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission and the New York Stock Exchange, are available without charge upon request to Volt Information Sciences, Inc., 560 Lexington Avenue, New York, New York 10022, 212-704-2400, Attention: Shareholder Relations. These and other SEC filings by the Company are also available to the public over the Internet at the SEC's website at http://www.sec.gov and at the Company's website at http://www.volt.com in the Investor Information section. VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF OPERATIONS (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 30, July 31, July 30, July 31, 2006 2005 2006 2005 ---------------------- ---------------------- (Dollars in thousands, except per share data) Net sales $584,914 $543,515 $1,728,233 $1,587,395 ====================== ====================== Income before minority interest and income taxes $14,278 $9,821 $30,135 $19,195 Minority interest -- Note A - (1,451) (1,021) (4,704) ---------------------- ---------------------- Income before income taxes 14,278 8,370 29,114 14,491 Income tax provision (5,925) (3,404) (12,028) (5,806) ---------------------- ---------------------- Net income $8,353 $4,966 $17,086 $8,685 ====================== ====================== Per Share Data Basic Net income $0.54 $0.32 $1.11 $0.57 ====================== ====================== Diluted: Net income $0.53 $0.32 $1.11 $0.56 ====================== ====================== Weighted average number of shares outstanding - basic 15,558,597 15,327,506 15,444,151 15,314,088 ====================== ====================== Weighted average number of shares outstanding - diluted 15,679,159 15,392,071 15,443,510 15,426,727 ====================== ====================== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 30, July 31, July 30, July 31, 2006 2005 2006 2005 ---------------------- ---------------------- (Dollars in thousands) Net Sales: Staffing Services -- Note B Traditional Staffing $484,882 $440,151 $1,415,066 $1,297,067 Managed Services 281,948 278,339 806,815 888,105 --------------------- ---------------------- Total Gross Sales 766,830 718,490 2,221,881 2,185,172 Less: Non-Recourse Managed Services (267,591) (268,305) (762,694) (861,790) --------------------- ---------------------- Net Staffing Services 499,239 450,185 1,459,187 1,323,382 Telephone Directory 21,426 23,899 54,437 56,972 Telecommunications Services 22,550 30,825 89,959 93,964 Computer Systems 46,305 43,806 139,716 127,920 Elimination of inter- segment sales (4,606) (5,200) (15,066) (14,843) --------------------- ---------------------- Total Net Sales $584,914 $543,515 $1,728,233 $1,587,395 ===================== ====================== Income (Loss) before Minority Interest and Income Taxes Staffing Services $16,248 $6,952 $35,573 $16,668 Telephone Directory 4,243 5,603 10,521 10,211 Telecommunications Services (189) (983) 539 (3,219) Computer Systems 6,046 8,050 21,632 24,579 --------------------- ---------------------- Total Segment Operating Profit 26,348 19,622 68,265 48,239 General corporate expenses (10,126) (9,220) (32,683) (26,503) --------------------- ---------------------- Total Operating Profit 16,222 10,402 35,582 21,736 Interest income and other expense (1,094) (297) (3,338) (1,043) Foreign exchange gain (loss) - net (351) 144 (707) (116) Interest expense (499) (428) (1,402) (1,382) --------------------- ---------------------- Income before Minority Interest and Income Taxes $14,278 $9,821 $30,135 $19,195 ===================== ====================== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) July 30, October 30, 2006 2005 ---------------------------- Assets (Dollars in thousands) Current Assets Cash and cash equivalents, $45,258 $61,698 Restricted cash 23,846 26,421 Short-term investments 4,410 4,213 Trade receivables, net -- Note C 360,597 399,677 Inventories 36,360 33,758 Deferred income taxes 8,522 10,246 Prepaid and other assets 25,779 19,788 ---------------------------- Total Current Assets 504,772 555,801 Property, plant and equipment, net 78,750 83,272 Deposits and other assets 1,901 2,102 Goodwill 50,523 32,623 Other intangible assets, net 34,332 14,914 ---------------------------- Total Assets $670,278 $688,712 ============================ Liabilities and Stockholders' Equity Current Liabilities Notes payable to bank $10,410 $6,622 Current portion of long-term debt 461 2,404 Accounts payable 172,762 172,788 Accrued wages and commissions 56,776 55,081 Accrued taxes other than income taxes 18,855 17,586 Other accruals 34,007 35,173 Deferred income and other liabilities 30,101 30,628 Income taxes payable 946 1,686 ---------------------------- Total Current Liabilities 324,318 321,968 Accrued insurance - 1,630 Long-term debt 12,948 13,297 Deferred income taxes 13,561 13,358 Minority interest -- Note A - 43,444 Stockholders' Equity 319,451 295,015 ---------------------------- Total Liabilities and Stockholders' Equity $670,278 $688,712 ============================ (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) A - In December 2005, Volt Delta Resources, LLC ("Volt Delta"), the principal business unit of the Computer Systems segment, purchased from Nortel Networks, Inc. ("Nortel Networks") its 24% minority interest in Volt Delta for $62.0 million, including an excess cash distribution of $5.4 million. Nortel Networks had originally purchased its 24% interest in August of 2004, and under the terms of the original purchase agreement, each party had a one-year option to cause Nortel Networks to sell and Volt Delta to buy the minority interest for an amount ranging from $25.0 million to $70.0 million, exercisable starting August 2006. During the first fiscal quarter of 2006, Volt Delta also purchased Varetis Solutions GmbH ("Varetis Solutions") from varetis AG for $24.8 million. The acquisition provides Volt Delta the resources to focus on the evolving global market for directory information systems and services. Varetis Solutions adds technology in the area of wireless and wireline database management, directory assistance/inquiry automation and wireless handset information delivery to Volt Delta's significant technology portfolio. The preliminary allocation of the purchase price of the transactions resulted in $17.9 million of goodwill and $20.8 million of intangible assets in fiscal 2006. B - Under certain contracts with customers, the Company manages the customers' alternative staffing requirements, including transactions between the customer and other staffing vendors ("associate vendors"). When payments to associate vendors are subject to the receipt of the customers' payment to the Company, the arrangements are considered non-recourse against the Company and revenue, other than management fees to the Company, is excluded from sales. Cash restricted to cover such obligations is segregated from cash and cash equivalents on the July 30, 2006 and October 30, 2005 balance sheets. C - Under a securitization program, the receivables related to the staffing solutions business of the Company are sold from time-to-time by the Company, through a 100%-owned consolidated special purpose subsidiary to an unaffiliated third party. During the third quarter of fiscal 2006, the Company reduced the outstanding interest sold from $140.0 million to $110.0 million. The outstanding balance of the participation interest sold was $110.0 million and $100.0 million at April 30, 2006 and October 30, 2005, respectively. Accordingly, the trade receivables included on the July 30, 2006 and October 30, 2005 balance sheets have been reduced to reflect the participation interest sold. CONTACT: Volt Information Sciences, Inc. Jack Egan and Ron Kochman, 212-704-2400 voltinvest@volt.com -----END PRIVACY-ENHANCED MESSAGE-----