EX-99.1 2 a5486256ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Volt Information Sciences Announces Third Quarter Results NEW YORK--(BUSINESS WIRE)--Sept. 6, 2007--Volt Information Sciences, Inc. (NYSE: VOL) today reported financial results for the Company's third quarter and nine months ended July 29, 2007. 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 1-888-552-9191 (domestic) or 1-210-234-0009 (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_releases.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 2007 RESULTS For the third quarter of fiscal 2007 ended July 29, 2007, net income increased by 9% to $9.1 million, or $0.40 per share, compared to $8.4 million, or $0.36 per share, in the fiscal 2006 third quarter. Net sales for the 2007 quarter increased by 4% to $610.5 million, compared to $584.9 million in last year's comparable quarter. Income before minority interest and income taxes increased by $0.3 million, or 2%, compared to the 2006 comparable quarter. NINE MONTHS - FISCAL 2007 RESULTS For the first nine months of fiscal 2007, the Company reported net income of $16.2 million, or $0.70 per share, compared to $17.1 million, or $0.73 per share, last year. Net sales for the 2007 nine-month period remained flat at $1.7 billion compared to the 2006 nine-month period. Income before minority interest and income taxes was $26.5 million in the nine months ended July 29, 2007 compared to $30.1 million in the comparable fiscal 2006 period. Commenting on the results for the third quarter, Mr. Steven A. Shaw, President and Chief Executive Officer of Volt, stated "We are pleased to report an increase in earnings for the third fiscal quarter due in part to the Computer Systems segment, which returned to positive quarterly year over year comparisons, and the Telecommunication Services segment, which has started to recognize both revenue and profits from multi-year contracts. We are addressing margin pressure in Technical Placement and the ongoing softening in the Administrative and Industrial sector of the economy with greater efficiencies and investments to support and grow our newer direct placement and RPO service offerings." STAFFING SERVICES Net sales for this segment increased by 4% to $519.1 million compared to the fiscal 2006 third quarter due to increased staffing business and VMC Consulting sales in the Technical Placement division offset by decreased business in the Administrative and Industrial division. Despite the increase in sales, operating profit decreased to $13.3 million from $16.2 million as a result of lower gross margin percentage and increased overhead costs primarily associated with newer business offerings including direct placement and RPO services. COMPUTER SYSTEMS The segment reported an operating profit of $6.9 million on net sales of $47.4 million in the third quarter of fiscal 2007 compared to an operating profit of $6.0 million on net sales of $46.3 million in the comparable prior year period. The sales increase is primarily due to an increase in the Maintech division's IT maintenance sales. The increase in operating profit was the result of the increased gross margin percentages due to the mix of business partially offset by increased overhead. TELEPHONE DIRECTORY The segment reported an operating profit of $4.2 million on net sales of approximately $21 million in the fiscal 2007 third quarter, the same as in the comparable prior year period. The increase in sales in the DataNational community telephone directory publishing sales was offset by decreases in printing sales in Uruguay, while the increased profitability of domestic directories was offset by the increased losses of the Uruguayan operations. TELECOMMUNICATIONS SERVICES The segment reported an operating profit of $0.9 million on net sales of $28.3 million in the third quarter of fiscal 2007 compared to an operating loss of $0.2 million on net sales of $22.6 million in the comparable prior year period. The improvement in profitability was due to the increased sales and higher margins generated by an increase in projects and the ramping up of a major telco services contract. GENERAL CORPORATE EXPENSES General corporate expenses decreased by $0.4 million, or 4%, in the third quarter of fiscal 2007 due to lower professional fees than the comparable fiscal 2006 quarter. CASH AND CASH EQUIVALENTS Cash and cash equivalents, excluding restricted cash, was $24.3 million at the end of the quarter. At July 29, 2007, the Company had sold a participating interest in accounts receivable of $90.0 million under its securitization program and had the ability to finance an additional $110.0 million under the facility. In addition, the Company may borrow under a secured $40.0 million revolving credit facility ("Credit Facility") and the Company's wholly owned subsidiary, Volt Delta Resources ("Volt Delta"), may borrow under a separate $100.0 million revolving secured credit facility ("Delta Credit Facility"). At July 29, 2007, $20.6 million was drawn under the Delta Credit Facility, of which $5.6 million was borrowed in foreign currencies. During the third quarter of fiscal 2007, the Company repurchased approximately 752,000 shares of its common stock in the open market as treasury stock at a cost of $15.0 million. Volt Delta has received the necessary regulatory clearances to proceed with its previously announced definitive merger agreement with LSSi Corp. The transaction is expected to close within the next two weeks and as a result of the merger, LSSi Data Corp. will become a wholly owned subsidiary of Volt Delta. The total merger consideration will be approximately $70 million in cash subject to adjustment based upon the amount of LSSi's working capital on the closing date. For the seven-month period from January through July 2007, LSSI had revenue of $16.8 million and EBITDA of $4.2 million, including $0.5 million in associated deal costs. The Company expects there to be significant synergies between the operations and for the acquisition to become accretive to earnings approximately six months after closing. 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 Relations/Corporate Governance section. VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF OPERATIONS (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 29, July 30, July 29, July 30, 2007 2006 2007 2006 ---------- -------- ---------- ---------- (In thousands, except per share data) Net sales $610,465 $584,914 $1,727,466 $1,728,233 ========== ======== ========== ========== Income before minority interest and income taxes $ 14,614 $ 14,278 $ 26,466 $ 30,135 Minority interest -- Note A - - - (1,021) ---------- -------- ---------- ---------- Income before income taxes 14,614 14,278 26,466 29,114 Income tax provision (5,497) (5,925) (10,229) (12,028) ---------- -------- ---------- ---------- Net income $ 9,117 $ 8,353 $ 16,237 $ 17,086 ========== ======== ========== ========== Per Share Data Net income per share - basic $ 0.40 $ 0.36 $ 0.70 $ 0.74 ========== ======== ========== ========== Net income per share - diluted $ 0.40 $ 0.36 $ 0.70 $ 0.73 ========== ======== ========== ========== Weighted average number of shares outstanding - basic 22,968 23,338 23,103 23,166 ========== ======== ========== ========== Weighted average number of shares outstanding - diluted 23,018 23,519 23,153 23,315 ========== ======== ========== ========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES SUMMARY OF RESULTS OF OPERATIONS BY SEGMENT (UNAUDITED) THIRD QUARTER ENDED NINE MONTHS ENDED July 29, July 30, July 29, July 30, 2007 2006 2007 2006 ---------- ---------- ---------- ---------- Net Sales: (Dollars in thousands) -------------------------- Staffing Services -- Note B Traditional Staffing $ 509,003 $ 484,882 $1,433,008 $1,415,066 Managed Services 275,819 281,948 904,644 806,815 ---------- ---------- ---------- ---------- Total Gross Sales 784,822 766,830 2,337,652 2,221,881 Less: Non-Recourse Managed Services (265,729) (267,591) (868,261) (762,694) ---------- ---------- ---------- ---------- Net Staffing Services 519,093 499,239 1,469,391 1,459,187 Telephone Directory 20,802 21,426 55,527 54,437 Telecommunications Services 28,347 22,550 76,897 89,959 Computer Systems 47,413 46,305 139,131 139,716 Elimination of inter- segment sales (5,190) (4,606) (13,480) (15,066) ---------- ---------- ---------- ---------- Total Net Sales $ 610,465 $ 584,914 $1,727,466 $1,728,233 ========== ========== ========== ========== Income (Loss) Before Minority Interest and Income Taxes Staffing Services $ 13,300 $ 16,248 $ 32,515 $ 35,573 Telephone Directory 4,243 4,243 9,162 10,521 Telecommunications Services 943 (189) 649 539 Computer Systems 6,932 6,046 17,639 21,632 ---------- ---------- ---------- ---------- Total Segment Operating Profit 25,418 26,348 59,965 68,265 General corporate expenses (9,678) (10,126) (29,852) (32,683) ---------- ---------- ---------- ---------- Total Operating Profit 15,740 16,222 30,113 35,582 Interest income and other (expense) 10 (1,094) (569) (3,338) Foreign exchange loss -net (305) (351) (758) (707) Interest expense (831) (499) (2,320) (1,402) ---------- ---------- ---------- ---------- Income Before Minority Interest and Income Taxes $ 14,614 $ 14,278 $ 26,466 $ 30,135 ========== ========== ========== ========== (Notes Follow) VOLT INFORMATION SCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) July 29, October 29, 2007 2006 ---------- ----------- Assets (Dollars in thousands) Current Assets Cash and cash equivalents $ 24,265 $ 38,481 Restricted cash - Note B 34,149 30,713 Short-term investments 5,152 4,709 Trade receivables, net -- Note C 419,097 390,799 Inventories 45,262 28,735 Recoverable income taxes 3,876 - Deferred income taxes 8,314 9,167 Prepaid insurance and other assets 32,663 37,280 ---------- ----------- Total Current Assets 572,778 539,884 Property, plant and equipment, net 69,884 74,135 Insurance and other assets 9,461 2,247 Goodwill 50,354 50,896 Other intangible assets, net 29,043 31,959 ---------- ----------- Total Assets $731,520 $699,121 ========== =========== Liabilities and Stockholders' Equity Current Liabilities Notes payable to banks $ 24,405 $ 4,639 Current portion of long-term debt 500 470 Accounts payable 203,055 190,431 Accrued wages and commissions 59,475 59,387 Accrued taxes other than income taxes 22,664 20,186 Accrued insurance and other accruals 27,906 29,241 Deferred income and other liabilities 45,486 37,519 Income taxes payable - 3,626 ---------- ----------- Total Current Liabilities 383,491 345,499 Accrued insurance 1,248 4,760 Long-term debt 12,448 12,827 Deferred income taxes 6,284 10,787 Stockholders' Equity 328,049 325,248 ---------- ----------- Total Liabilities and Stockholders' Equity $731,520 $699,121 ========== =========== (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 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 provided Volt Delta the resources to focus on the evolving global market for directory information systems and services. Varetis Solutions added 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. 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 balance sheet. 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. The outstanding balance of the participation interest sold was $90.0 million and $110.0 million at July 29, 2007 and October 29, 2006, respectively. Accordingly, the trade receivables included on the July 29, 2007 and October 29, 2006 balance sheets have been reduced to reflect the participation interest sold. D - On December 19, 2006, the Company's Board of Directors authorized and approved a three-for-two stock split in the form of a dividend on the Company's common stock, par value $.10 per share. Shares of common stock were distributed on January 26, 2007, to all stockholders of record as of January 15, 2007. Share amounts and per share data have been adjusted to reflect the stock split. CONTACT: Volt Information Sciences, Inc. Jack Egan and Ron Kochman, 212-704-2400 voltinvest@volt.com